BUSINESSES are starting to bring pay rises under control. The latest trends survey shows that this year local companies expect salary bills to continue to increase at a quicker rate than income.

But, compared to last year, firms believe that they will be able to increase the rise in fees while cutting the rise in salaries.

The Young Business Group survey shows that fees are expected to rise by 3.2% – more than last year’s 2.31% while salary bills are expected to be up 4.12% against a 6/9% increase during 2003.

‘Last year there was a marked difference in the rise in total wages compared to the rise in fees,’ said YBG president Matt Polson.

‘The rise in wages was much higher than is predicted for this year and that is perhaps not surprising as those figures are not sustainable; an almost 7% rise in wages is very high.

‘It is important to realise that total wages are a combination of the cost of individuals and the number of staff, so perhaps this year companies have decided not to take on as many staff as opposed to changing wages rates.

The study also revealed that the predicted increase in individual salaries for 2004 is 3.8%. Mr Polson said that it was almost identical to the most recent local quarterly inflation rate figure of 4.2% and not much higher than the expected 3.32% increase in fees.

‘It is not surprising that employers are looking to provide cost of living increases. We can also see that increases in fee rates remain lower given the competitive markets which mean employers can’t push up fees too much.’

According to the survey, there has also been a change in attitude towards the merits of the UK and therefore Guernsey joining the European Monetary Union. Last year 31% though adopting the euro would be a good move but in 2004 that had fallen to 23%.

There has been a corresponding increase in the number of those who are actively against joining, with 57% of businesses now wanting the UK government to retain the pound.

‘This is not particularly surprising because there has never been a majority in favour of adopting it, but it seems that people have moved from the undecided to the not-in-favour category,’ said Mr Polson.

‘Individuals have their own opinions on the subject so I could only speculate on the reasons for the shift in opinion. I think there is a lot of confusion and misunderstanding and people therefore prefer the status quo.

‘In the non-financial sector there is perhaps less well-informed opinion of the impact and therefore people rather go with the status quo. There is a good environment for business at the moment and without information about any changes, people will stick with what they have got.

‘What would be interesting to know is the breakdown of the individual sectors, especially comparing the finance sector to the non-finance sector, because I think perhaps people in the finance industry have more information about what might happen to them.’