Pay Hikes for 2006 Average 3.5 Percent; Fourth Year Under 4 Percent, Survey Finds

According to a recent survey by the Conference Board, for the fourth consecutive year annual pay raises budgeted by companies for 2006 were below 4 percent, and were expected to remain at that level in 2007.  Average salary increases this year were 3.5 percent for employee groups in most industries, including manufacturing, retail and wholesale trade, and utilities.  "Moderate inflation has allowed employers to continue to control payroll costs," Charles Peck, Conference Board compensation specialist, said.  "This continued control is reflected in the pattern of salary increase budgets this year compared with last year's projections."

The rate of inflation should remain below the salary increase budgets this year and next, Peck said.  The Conference Board estimated a 3.1 percent increase in inflation for 2006 and a 3.3 percent increase for 2007.