PAY settlements continue to edge upwards and could threaten recovery
in the jobs market, the Confederation of British Industry claimed
yesterday.
Figures from the CBI Pay Databank suggest that the effects of rising
pay deals on competitiveness are being masked by continuing productivity
growth in manufacturing.
For the three months ended in November, manufacturing pay awards
averaged 3.5% against an average of 3.3% in the three months ended in
October and 2.3% a year ago. Comparable rises in productivity were 3.7%
in the second half of 1994 and 4.7% a year earlier.
In the services sector including finance, catering, communications and
retailing, the CBI survey found that pay rises were even better with
improvements of 4.3% in the last three months to November compared with
an average of 3.7% in the third quarter.
''With price rises low, British workers are receiving bigger real
rises that the employees of our major competitors -- many of whom are
now accepting real cuts in pay'' commented CBI employment affairs
director Mr Robbie Gilbert.
UK unit labour costs have fallen by 2% over the past year which in the
past would have given an exceptional boost to our competitiveness.
However the Germans and others have cut their labour costs by 6%.
''That is the competitive standard our businesses have to meet today
to protect incomes and jobs in the longer term'', he added.
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