Pay settlements rise to average of 3%

The level of pay settlements has begun to pick up and looks set to accelerate throughout the year, a new survey shows today.

The data from April shows average wage deals giving rises of 3 per cent, compared with 2.5 per cent in the first three months of the year. Although public sector increases account for some of the difference, the survey, by Incomes Data Services, found pay rates in the private sector are also rising.

The picture in the private sector ranges from wage freezes in the electronics sector to pay increases of more than 5 per cent in the construction industry.

"With the economy picking up, the labour market showing resilience in the face of uncertainty after 11 September and a surge in public sector spending in prospect, the signs are that the low point for pay deals is past," IDS reports.

Its first estimate of the average settlement in the second quarter of 2002 is 3 per cent, up from 2.5 per cent in the first quarter and comparing with an inflation rate of less than 1.3 per cent.

A clutch of public sector pay awards added 4 per cent to paybills for major groups such as nurses, doctors, school teachers and the armed forces.

The survey found low headline settlements for banking sector employees, including 1.75 per cent at Barclays, although these were accompanied by substantial performance bonuses.

Among retailers, recent deals include a 2.75 per cent rise at Safeway, 2.3 per cent minimum rise at Sainsbury's, and 3 per cent at Argos.

The IDS survey registered 239 pay deals since the start of the year, covering 1.6 million employees.

Separately, a survey of the consultancy recruitment market found female consultants are paid an average 10 per cent less than their male colleagues. The report, by Huntswood, the recruitment firm, found one in four consultants have been forced to take a pay cut when changing jobs in the past year.