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Survey: Manufacturing pay increases projected to grow again

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Pay increases for all levels of manufacturing employment hit a slow slide during the past three years but are poised to rebound in 2014, according to a recent survey by York-based The Manufacturers' Association.

The survey found that average pay increases at midstate manufacturers were less than 1 percent in most cases in 2010, then jumped to well over 2 percent the next year, with incremental declines at all levels after that, according to the association, which was formerly known as the Manufacturers' Association of South Central Pennsylvania.

However, projected pay increases for 2014 are once again on the rise, according to the survey.

"The survey tells us companies are more optimistic than they were," said Michael Smeltzer, the association's executive director.

The largest average pay increase for all levels of employment was 2.71 percent for exempt employees -- those not eligible for overtime pay -- in 2011, according to the survey. The only pay decrease was 0.01 percent for executive-level employees in 2010.

The results are drawn from surveys of 33 companies in the midstate, ranging in size from those with a few dozens employees to those with hundreds and thousands of employees, according to the association.

Hesitation and health care costs are affecting how much manufacturers are willing to give employees in pay increases, Smeltzer said. Work backlogs are still weak at many manufacturers, so that generates a bit of uncertainty and causes companies to scale back on pay increases, he said.

Practically, many manufacturers will have to look at the ups and downs of orders and backlogs to determine whether the projected increases next year are still sustainable as it approaches, Smeltzer said.

He has spoken with one manufacturing executive who said he had the best six months in the company's history and then orders completely collapsed.

That's when the discussion has to turn to internal cost structure review, modernization and the search for new markets so that companies are better prepared for the good times and bad times in the future, Smeltzer said.

But the "new norm" of high-frequency peaks and valleys in business doesn't instill a lot of confidence in manufacturers, he said.

"I think that's frustrating to our business executives," he said.

Overall, statistics illustrate it hasn't been the best of times for manufacturing, with fewer people employed and weekly wages down compared with the pre-recession industry.

Here's a look at the five-year trend of average percent pay increases and projections at Central Pennsylvania manufacturers in this survey:

Jim T. Ryan

Jim T. Ryan

Jim T. Ryan covers Cumberland County, manufacturing, distribution, transportation and logistics. Have a tip or question for him? Email him at jimr@cpbj.com. Follow him on Twitter, @JimTRyanCPBJ.

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