Pay rises in manufacturing sector

An engineer working on the production line at the Toyota plant, Burnaston, near Derby.

An engineer working on the production line at the Toyota plant, Burnaston, near Derby.

First published in National News © by

Pay rises in manufacturing firms are higher than last year, suggesting the green shoots of recovery are "firmly taking root", according to a new report.

A survey of almost 250 wage settlements covering 40,000 workers showed average deals of 2.6% in recent months.

The EEF manufacturers' organisation said its study took in one of the year's big pay rounds so will be seen as "setting the scene" for the year.

Pay deals last summer averaged 2.2% but have now moved above the rate of inflation, while the number of wage freezes has stabilised at 5%, said the EEF.

Ms Lee Hopley, chief economist at the EEF, said: "We're by no means out of the woods yet, but there's plenty to suggest that we're on the right path.

"Pay settlements seem to be stabilising at a level that is both affordable and higher than last year. This is another good indication that the green shoots of recovery are firmly taking root and the pressure on household budgets, at least for manufacturing employees, is starting to unwind.

"Manufacturing continues to be a driving force and this also reflects in the growth of pay where the sector is outpacing the rest of the economy. Put simply, workers in the sector are reaping the rewards of recovery earlier than others. Hopefully this level of confidence will continue as manufacturers carry on picking up pace."

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