As the Government reshuffles responsibility for the construction industry, the UK's largest sector employers' organisation, the EEF, says that pay levels in parts of the industry are stagnating.
Engineering pay settlements have fallen to their lowest level for nearly 12 months, according to a recent the Engineering Employers' Federation (EEF) survey.

The average settlement for the three months to May 2001 was 2·6%, compared to the revised figure for the previous three months of 2·9%. In addition, the average figure for the 50 settlements that have so far been reported for May 2001 was only 2·0%, the lowest monthly figure for more than two years.

During the last three months the number of pay freezes has increased significantly to nearly one in six of all reported settlements. In May 2001 alone, it is believed more than one third of the reported settlements were pay freezes.

EEF deputy director of employment policy David Yeandle, said: "This sharp fall in pay settlements is a clear indicator of how rapidly manufacturing conditions are now deteriorating. It reinforces our view that the Monetary Policy Committee will have to give serious consideration to making a further cut in interest rates in the near future."

The MPC is the official body which sets interest rates through the Bank of England.

While the EEF is a combination between a nationwide federation of 13 regional associations and the Engineering Construction Industry Association (ECIA).

The EEF has a membership of over 5 700 companies of all sizes, from all sectors of engineering, manufacturing, engineering construction, and technology-based industries.

Furthermore, the EEF is the largest sector employers' organisation in the UK.

The June Pay Bulletin analyses 349 reported settlements affecting 43 304 employees. Of these, the March average was 3·2%, the April average 3·0% and the May average was 2·0%. These figures are liable to revision to take into account settlements not yet received.

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