By Daniel Hunter

The start of 2013 has seen little evidence of pay pressures emerging in manufacturing ahead of the key bargaining period, according to the latest survey on pay data from EEF, the manufacturers’ organisation and JAM Recruitment.

According to the survey of companies for the three months to the end of December 2012, the average pay settlement for the period was 2.4%, the same as the previous 3 month period to the end of November.

In addition, as a sign of the continued economic uncertainty at the end of last year the number of pay agreements which were deferred had crept up to almost 11% of settlements, up from just over 8% in the previous 3 month period. Pay freezes also edged up slightly to just over 7% of settlements though remained well below the level of freezes seen in recent years.

On a positive note, despite continued skill shortages and difficulty recruiting the survey also showed that no company foresaw pay pressures as a risk to growth in 2013. Poor labour relations are also viewed as little risk to manufacturers.

Ms Lee Hopley, EEF Chief Economist, said: “As we enter the key negotiating period for manufacturers there is little if any evidence of pay pressures. Continued economic uncertainty, together with other indicators suggesting growth is likely to remain weak for the rest of this year mean there is little to concern policymakers who fear upward pressure on pay.”

John Morris, Chief Executive of JAM Recruitment, said: “The absence of any uplift in settlements and the high level of deferrals shows that businesses are maintaining the same cautious approach to pay that we have seen over the past two years. While this is understandable after a 2012 that has been turbulent across the board and particularly challenging in some areas, it is vital for manufacturers to focus on retaining their core talent so they are able to capitalise on opportunities in the year ahead.”

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