London, UK Over 50% of the UK electronics manufacturers industry will be unable to afford the 4% average wage increase estimated for next year according to research by Plimsoll which has examined the financial performance of the top 1000 UK electronics manufacturers companies.
The average salary next year is set to rise from £25,301 to £26,303 and the research by Plimsoll has concludes that with profit margins at a record low and with 37% of the industry already loss making, any increase in salary costs could be considered 'foolhardy'.
Plimsoll says 55% of the industry seems to be losing the productivity race. The amount of sales these companies generate per employee is £62,189. The most productive companies generate almost twice this figure at £119,586 or around 31% of sales on salaries. For the unproductive this figure rises to nearly 24% of sales.
The analysis has also placed 43% of the 1000 companies in 'financial danger'. This situation means these companies have severe financial constraints making extra costs simply unsustainable.
David Pattison, Senior Analysis at Plimsoll Publishing said, “The productivity race has started. You only have to look at the USA where any increased sales have not lead to extra jobs. Companies have just got more productive by getting more sales and profit out of their existing employees simply to remain competitive. In the UK, companies must be aiming for at least £102,000 per person to even get in the race.”