Manufacturing Sector Salaries Jump 10.2 Percent
Jun 18, 2004
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Reflecting the optimism in terms of sales and net profit growth, the manufacturing sector hiked the salaries and wages of its employees by 10 percent in 2003-2004.
This is the biggest rise in the last 5 years. Between 1999-2000 and 2002-2003, salaries in the manufacturing sector increased between 3.81 percent and 6.59 percent per annum. This study is based on the figures reported in the annual reports of 1,200 companies in the manufacturing sector.
Even so, salaries did not grow in line with the increase in sales and profits of the manufacturing sector. While the pre-tax profits of the sample increased 48.79 percent in 2003-2004, the salary bill increased only 10.20 percent.
Thus, salaries as a percentage of sales declined from 6.54 percent in 2002-2003 to 6.24 percent in 2003-2004. This ratio was higher at 7.13 percent in 2001-2002.
The more liberal employers in the manufacturing sector in 2003-2004 were in sectors such as chemicals, machine tools, pesticides, dyes and chemicals, steel, bearings, auto mobiles ancillaries, and commercial vehicles.
The chemicals sector increased its staff’s salaries by 40.31 percent in 2003-2004 out of a 160-percent rise in net profits. Steel companies increased their staff salaries by 24.1 percent on the back of a 528.6-percent rise in net profit.
The best paymasters of the yesteryears are cutting their staff costs. The shining example is the fast-moving consumer goods sector, where companies are facing the heat of the demand recession and competition. The salaries in the personal care sector, for example, declined by 3.33 percent in 2003-2004 as their net profit increased by 6.88 percent.
The salaries and wages in the paint industry declined 4.50 percent and that of white goods companies declined 20.2 percent. Cotton textiles firms continued to axe staff costs to preserve their internal accruals. (Rediff.com)
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