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Construction firms take lead on pay freezes

One third of all British companies have frozen their pay rates this year, with an above average number of construction firms making the choice to put off wage increases, new research suggests.

Pay analysts IDS said that while an average of one in three businesses had failed to push up staff wages, workers in the construction, automotive and media sectors had been hit particularly hard.

The report said: “In many cases pay freezes have been justified through commitments to safeguard jobs. Firms are conscious of the need to retain a skilled workforce for when the market eventually picks up and are trying to avoid unnecessary cuts.”

It found wage rises were more likely among employees working in energy, pharmaceuticals, bus and rail transport, food retailing and finance, although such sectors had been badly hit by job losses.

IDS claimed that most companies that did not increase workers’ pay this year were planning to award increases in 2010.