Brighter pay prospects in the manufacturing sector

UK manufacturing pay awards show signs of improvement as the median value of pay awards stands at 3%, compared with 2.75% over the same period in 2003, according to a report released today (12 August 2004) by IRS Employment Review, published by LexisNexis.

Sectoral differences persist, with settlements in the food, drink and tobacco industry outstripping those in paper and printing.

The results are available in the new issue (805) of IRS Employment Review (www.irsemploymentreview.com). The survey analyses 209 manufacturing settlements collected by IRS pay specialists between 1 September 2003 and 31 May 2004. It covers more than 310,000 employees.

Key findings:

Manufacturing awards keep pace - the median settlement in manufacturing in the period under review stands at 3%, exactly the same as that for the economy as a whole and the service sector over the same period (see notes to editors).

Pay awards tightly bunched - the lower quartile, the point at or below which the bottom 25% of manufacturing pay awards are located, stands at 2.7% for the nine months between 1 September 2003 and 31 May 2004. At the opposite end of the pay spectrum, the upper quartile, the point at or above which the top 25% of settlements are found, is pitched at 3.2%. This means that the middle 50% of manufacturing awards (commonly known as the inter-quartile range) are covered by just half a percentage point.

Sectoral differences persist -

In the food, drink and tobacco sector, the median pay award is pitched at 3.1%, compared with 2.6% in the paper and printing industry (0.4 percentage points below the economy as a whole).

The median pay award in the engineering sector stands at 3%,a rise of 0.5 percentage points on the 2002/03 figure.

In general manufacturing, the median pay award also stands at 3%, compared to 2.5% over the nine months between 1 September 2002 and 31 May 2003

Chemical industry pay settlements over the nine months to the end of May 2004 stand at 3%, the same level as in the corresponding period last year.

Bargaining pace quickens - a breakdown of a matched sample of 96 manufacturing pay reviews confirms that the pace of bargaining has picked up over the past 12 months. Just over half of monitored deals (51%) are higher than received by the same employee group last time around; 25 (26%) are lower; and 22 (23%) are the same.

IRS Pay and Benefits editor, Sheila Attwood said:

ìA combination of an improving global outlook and continued domestic expansion has resulted in a gentle upward pressure on settlement levels in key parts of UK manufacturing. However, not all sectors have benefited from the upturn.

ìThe outsourcing of work, particularly to the Far East; the move away from final-salary pension schemes; and the knock-on effects of acquisitions and mergers are all of concern to manufacturing trade unions. While the future may look brighter, many people within manufacturing are cautious in their celebrations.î