Two-thirds of manufacturing companies are now freezing the pay of their workers, the highest number on record, a new report revealed today.
The Engineering Employers Federation said another 16% of firms had deferred pay settlements in recent months, while average rises fell to 0.7% from 0.9%.
Pay rises are likely to continue falling in the coming months, while the number of firms freezing pay has reached the highest level since the EEF's records began in 1987.
David Yeandle, the EEF's head of employment policy, said: "This unprecedented high percentage of manufacturers freezing pay and the resultant historically low level of average pay settlements are clear signs of the adverse impact that the economic downturn is continuing to have on the manufacturing sector.
"The figures also show that, working with employees and their representatives, manufacturers are trying to manage pay far more flexibly than they have done in previous recessions."