In the three months to the end of April, pay increases averaged 1.7% — slightly down on the 1.8% reported for the three months to the end of March — according to the EEF (www.eef.org.uk).

Lee Hopley (pictured), the chief economist at the manufacturers’ organisation, said its latest Pay Bulletin survey confirms that “there is a lid on wage inflation, and any expectations of an acceleration in pay growth aren’t likely to come from manufacturers this year.

“There are plenty of reasons for companies to be taking a cautious stance on pay deals at the moment, particularly with a more-fragile growth outlook and political uncertainty on the horizon. Added to this is the introduction of the National Living Wage (NLW), which has potentially prompted a shift in companies’ approach to across-the-board pay increases. This will be a trend to watch, as the NLW rate accelerates out to 2020.”

Other new research published last week by the EEF shows that underlying labour conditions in manufacturing have stabilised, with labour turnover rates recovering to pre-recession levels.

A spokesman said: “Turnover rates have been slowly rising over the past few years, as the economy has moved back into recovery and labour market conditions have normalised. We’ve seen a similar picture in official data that points to the number of vacancies in manufacturing creeping back to pre-recession levels.”