MANUFACTURING workers are continuing to see the benefit of economic recovery in their earnings, according to the latest pay data.

The data from industry body EEF shows that the average pay settlement in the six months from February to July was 2.6 per cent.

Importantly, this includes April, one of the year’s major pay rounds, which is seen as a good indicator for pay this year.

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At 2.6 per cent the figure is an increase on last year where pay settlements averaged out at 2.4 per cent. Furthermore, pay deferments and freezes have continued to fall, with the three month average for freezes in July this year running at just 6.4 per cent compared to 14.6 per cent in July 2013.

The news follows last week’s data showing that earnings are struggling to recover across the wider economy. In contrast, EEF’s findings suggest that manufacturers are rewarding their employees after a very difficult economic period, which saw a substantial number of deferments and freezes.

Employers are also countering the effects of skills shortages by paying above-inflation awards to retain and attract key staff.

A separate report showed fewer firms across a range of industries are freezing the pay of their workers, although average increases have remained at two per cent in recent months.

Settlements in the quarter to July were unchanged from the three months to April, 0.5 per cent below the latest RPI inflation figure of 2.5 per cent, said pay specialists XpertHR.

Its research among almost 100 deals found that less than one in 10 resulted in a pay freeze, while one in four were worth at least 2.8 per cent.

Over the past year the median pay award in the private sector was worth 2.1 per cent, compared with 1 per cent among public sector organisations.

TUC general secretary Frances O'Grady said: "It is good to see some signs of better pay awards for some in the private sector, but public sector workers continue to suffer from cuts to their living standards and millions are still excluded from economic recovery.

"The bigger economic problem remains. The UK has become an economy good at creating poorly paid, low-productivity, insecure jobs but this is no basis for a successful economy for the long term."

Andy Tuscher, North East Region Director at EEF, said: “Manufacturing pay continues to run ahead of the wider economy with signs that the pressure on household budgets, at least for those in industry, is starting to unwind.

“After many challenging years, manufacturers now seem to be in a position to pay their employees back for their support in keeping jobs and businesses going. But while business across the sector is on the up, affordability will remain a key consideration in future pay deals as manufacturers grow in confidence that the recovery is secure.”