A survey used to decide whether to give civil servants pay rises has shown - for the first time in 26 years - that private sector wages have fallen. Civil service unions reacted immediately, saying they were opposed to reductions. The Pay Trend Survey's 'gross indicator' said salaries had fallen by 0.62 per cent for lower-ranked staff, 0.7 per cent for middle-ranked staff and had risen by 0.87 per cent for senior staff. After deducting the annual increments many civil servants receive based on seniority, the net indicator comes to minus 1.78 per cent for junior staff, minus 1.97 per cent for middle-ranking staff and minus 0.41 per cent for senior staff. The Government will decide whether to follow the indicators after consulting staff unions before the end of the month. A recommendation will be submitted to Legco by the end of June. The decision has implications for most of the workforce, because many companies consider the civil service adjustment when deciding employees' pay rises. Civil service unions said they could consider a freeze but not a cut, saying this would undermine morale. Leung Chau-ting, chairman of the Federation of Civil Service Unions, said he would object to a pay cut. 'I am worried a cut will draw radical reactions from civil servants such as staging protests. A freeze is acceptable.' Leung Chi-chiu, chairman of the Senior Non-Expatriate Officers' Association, took the same stance. 'The Government's financial situation is improving. There is no need to cut civil servants' salaries.' Li Kwai-yin, deputy secretary-general of the Chinese Civil Servants' Association, said his members would consider accepting a freeze only because 'we agree we should share the pain of the public. However, workload has increased under the Enhanced Productivity Programme', referring to Tung Chee-hwa's order to improve efficiency. But James Tien Pei-chun, the Liberal Party chairman who represents the commerce functional constituency, supported pay cuts. 'I think minus 1.97 and minus 1.78 per cent are not negligible. I would support the Government sticking to the indicators. I don't think it would undermine their morale.' He said deflation of about four per cent last year meant there would be no adverse effect on purchasing power. Executive councillor Tam Yiu-chung, a member of the Democratic Alliance for the Betterment of Hong Kong, was against a cut, arguing it 'would put psychological pressure on staff'. Unionist legislator Chan Yuen-han, of the Federation of Trade Unions, urged the Government not to cut or freeze civil servants' salaries. Eden Woon Yi-teng, director of Hong Kong General Chamber of Commerce, said: 'I would reluctantly agree to a pay freeze as it is difficult to impose a pay cut in reality.' Nearly half of the 190,000 civil servants enjoy annual increments despite pay freezes. Pay was frozen last year although the net indicator was negative, ranging from minus 0.13 to minus 0.84 per cent after deducting the annual increment based on seniority. It was 0.59 to 2.12 per cent before the deduction. The survey was conducted on 75 companies in the last financial year by the Pay Trend Survey unit of the Standing Commission on Civil Service Salaries and Conditions of Service.