UK manufacturing workers suffer dip in pay

New pay survey shows that factory workers' pay in the UK has fallen

Salaries in the British manufacturing sector fell to 3.1 per cent in September from 4.3 per cent in August, according to an index of take-home pay.

Despite the depreciation of sterling, which makes UK manufacturers more competitive with overseas companies, many firms are struggling with the high cost of raw materials and weakening world markets, according to the VocaLink index.

The impact of the credit crunch on lending has hit manufacturers especially hard due to the high capital intensity of the sector.

Richard Cooper, marketing director at VocaLink, said: "It is no surprise to see that levels of growth in the take-home pay index are being hit by the credit crunch. With the cost of living rising more quickly than take home pay, UK employees, particularly those in the manufacturing sector, are being forced to dip into savings to maintain their standard of living."

Douglas McWilliams, chief executive of economics consultancy Cebr, said: "As the financial situation worsens and the outlook for the economy becomes bleaker it is likely that the downward trend indicated in the VocaLink take home pay index will continue."

VocaLink says that it processes over 90 per cent of UK salaries and claims its take-home pay index is the most accurate disposable income data available in Britain, being based on actual payments made to employees on a three-month moving average compared with the same measure a year earlier.

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