The Conference Board Annual Salary Increase Budgets Survey reported the lowest yearly forecast for company salary budgets since the survey began 25 years ago. The 2010 median forecast salary increase budget is 3 percent in all employee categories, down a half percentage point a percent from the previous year.

Along with The Conference Board’s labor market indicators, “this historic low suggests that, entering this holiday weekend, workers shouldn’t be looking forward to much improvement in the labor market,” Linda Barrington, managing director of human capital at The Conference Board, said in a press release.

Changing market conditions throughout 2009 pushed companies to adjust downward their salary increases as the economy worsened. The survey found a full percentage point drop in the median of the 2009 budgeted salary increases in all employee categories except executive, to 2.5 percent from 3.5 percent. The executive category took the biggest hit – down 2 full percentage points (to 1.5 percent from 3.5 percent).

Across industry categories, insurance reported the highest 2010 forecasts for budgeted salary increase in all employee categories, 3.5 percent, while communications reported the lowest in all employee categories, 2.5 percent.

Though the median forecast budgeted salary increase is low, the typical employer is still budgeting for salary increases that exceed the pace of inflation in 2010. Suppressed, in part, by slack in production capacity, The Conference Board projects the inflation rate to be 2 percent this coming year. The information for the report was gathered from 291 companies surveyed between April 7 and April 30.