Latest pay award data show signs of thaw


Latest pay award data show signs of thaw

The proportion of pay freezes in the private sector may be falling, under the influence of higher inflation and a recovery in output in key sectors, according to pay analysts IDS. At the same time, new public sector awards for 2010 are significantly lower than those in the private sector.

The latest data on pay awards from, for the three months to the end of February, show that the median settlement for the whole economy is 1.8%, down slightly on the figure of 1.9% for January. At the same time, the proportion of freezes is also down slightly, from 37% to 34%.


Manufacturing pay deals outstrip services

The median settlement in manufacturing, at 2%, is double that for private services, at 1%. According to IDS, a greater proportion of pay freezes have been awarded in the service sector, and there are considerably fewer higher-end increases than in manufacturing.

While nearly a fifth of pay deals in manufacturing are at or above 3%, no settlements have been recorded by IDS at this level in private services. The incidence of long-term agreements in manufacturing – many with a link to inflation – has partly contributed to the picture here. A fifth of manufacturing awards have been made under long-term deals, compared with less than one in ten in services.

Summary of key settlement data

For the three months to the end of February 2010, based on 94 settlements covering 279,513 employees in total, the key statistics are these:

  • Whole economy median: 1.8%

  • Whole economy average: 1.5%

  • Whole economy inter-quartile range: 0% to 2.5%

  • Manufacturing and production median: 2%

  • Private services median: 1%

A final word

“The distribution of settlements in the private sector remains bi-modal rather than normal, with twin peaks at 0% and in the 2-2.99% range. However the proportion of freezes looks like it may be falling, though there are clear differences between manufacturing and services. The likely influences here are a recovery in manufacturing output, with short-time working winding down, and higher inflation.

“Looking further ahead, private sector awards look set to outpace those in the public sector, though much depends on the pace of economic recovery. We can already see the impact of the government’s pay squeeze on public sector settlements.” - Ken Mulkearn, Editor of IDS Pay Report.

Want to know more? is a new online source of all the remuneration data collected by IDS, on pay settlements, pay levels and executive compensation. Visit

IDS Pay Report, published fortnightly, is the “UK's leading source of research and analysis on pay and benefits across the economy”.

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