Manufacturers are paying their workers more in a tentative sign that wage growth – a missing piece of the UK’s recovery – is starting to pick up in some parts of the economy.

The average annual pay settlement in the sector was 2.6 per cent in the six months to July, up from 2.4 per cent a year ago, according to a survey of 331 companies by manufacturers’ organisation EEF. The proportion of respondents using pay freezes fell to 6.4 per cent from 14.6 per cent a year ago.

Lee Hopley, the EEF’s chief economist, said manufacturing pay growth was ahead of the wider economy, “with signs that the pressure on household budgets, at least for employees in the industry, is starting to unwind”.
Data from Adzuna, an online job search engine, showed a similar trend. Average advertised salaries for manufacturing jobs were at a two-year high on the site in July. The company also reported the first annual increase in the average advertised salary since the recession in 2008-09.