Nearly Half of Regional Firms Freeze 2012 Pay

Nearly half of businesses in the North East will not increase wages in the coming 12 months.

As part of a survey, conducted by NECC, over 48% of companies said they would not be changing pay settlements agreed with employees a year ago.

Over 35% of the businesses surveyed, as part of NECC's quarterly Business Barometer survey, said they would be increasing wages by between 2% and 3%, with 1.5% saying they were actually planning to reduce wages from those paid in 2011.

NECC Director of Membership and Policy, Andrew Sugden, said:

"We need to create more wealth in the North East and for this to happen we must focus on delivering strong business growth that will positively impact household incomes.

"By taking a pragmatic approach to wage increase, businesses are future-proofing themselves against potential economic fluctuations and will be healthier for it in the long run.

"The fact so many companies are taking this course of action is a demonstration that inflation is not a home-grown issue and interest rate increases are not required in 2012.

"In the current economic climate pay freezes represent a sensible course of action to help companies insulate themselves against global economic conditions and are in-line with the public sector wage freezes we have seen across the UK."

Average pay settlements 2012:

• Decrease 1.4%
• No change 48.6%
• 1% increase 5.2%
• 2% increase 17%
• 3% increase 18.4%
• 4% increase 2.4%
• 5% increase 6.6%
• 6% increase or more 0.5%