Average pay settlements in the manufacturing industry were up 2.6 per cent in the period running from February to July this year, according to a leading industry body.

The Engineering Employers’ Federation (EEF) said the figure, drawn from a survey of 331 companies and 68,000 employees, meant the industry was giving better pay raises than others.

Official data shows average pay climbing at just 0.6 per cent in the three months to June compared with that period last year.

Jeff Neild, national head of employment & industrial relations at EEF, said: “After many challenging years, manufacturers are now literally paying their employees back for their support to keep jobs and businesses going.

“Business across the sector has clearly been on the up but this new post-recession landscape is, however, presenting employers with a new set of challenges in managing relationships with their employees.”

Manufacturing pay settlements were slightly higher than this time last year when they were 2.4 per cent.

In other good news, the number of pay settlements and deferments fell dramatically year-on-year, from 14.6 per cent in July 2013 to just 6.4 per cent last month.