Downward trend in Dutch pay settlements continues

The latest official figures from the Netherlands show that pay increases are continuing to fall.

On average pay rose by 2.9% on an annual basis in the second quarter of 2003 compared with the same period last year. This compares with a 3.4% in the first quarter of the year. Unions agreed at the end of 2002 to limit negotiated increases to 2.5% this year and this promise has largely been kept to.

However, long-term pay deals agreed earlier are still working their way through the system.

The unions accepted lower pay increases because of concern over inflation in the Netherlands. However, last month the central statistical office announced that it had made a mistake and that its estimate for price increases was too high by probably one percentage point. It is currently re-examining its figures.