The number of manufacturing firms freezing pay or deferring wage increases has risen sharply to almost one in four in the last three months, a new report revealed today.
A survey of almost 100 recent settlements showed the extent of the squeeze on industry created by the economic downturn, said the Engineering Employers Federation.
Its study covering the three months to end of October, showed that nearly 12 per cent of companies reported that they had deferred their pay settlement, the highest level since November 2001, and nearly 13 per cent of them had frozen pay, the highest level since December 2003.
The average level of pay settlement fell back sharply to 2.8 per cent for the three months to the end of October, down from the revised figure of 3.1 per cent for the 3 months to the end of September
After a prolonged period when settlements have remained just above 3 per cent, this was the lowest figure reported since June 2006.
David Yeandle, the EEF's head of employment policy, said: "The severity of these changes over such a short period of time indicates the extent to which companies are having to take immediate action to control their costs. It seems hard to believe it is only a few months since fears about wage inflation were so prevalent."Reuse content