North West manufacturers face ‘significant’ job cuts

Manufacturers’ organisation Make UK says the Government needs to offer immediate support for manufacturers as output hits a record low. Tony McDonough reports

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Manufacturers say the coronavirus crisis has left them in a perilous position


Manufacturers in the North West are calling for a fresh Government support package for the sector saying the coronavirus crisis may lead to “significant redundancies”.

June Smith, head of the North West division of manufacturers’ organisation Make UK, said Chancellor Rishi Sunak needed to call an emergency Budget and offer a lifeline to the sector which is recording record low levels of output.

The grim statistics, which show manufacturers in their worst position since the financial crisis a decade ago, were illustrated in the latest Make UK/BDO Q2 Manufacturing Outlook survey.

Make UK has already called on the Government to step in with direct support for key strategic sectors of manufacturing, in particular aerospace and automotive on which the North West heavily depends, as well as set up a National Skills Task Force.

However, given the extent of the damage to manufacturing and its long supply chains, it now wants the Government to go further to provide immediate respite to company cashflow without which it fears the prospect of significant redundancies.

Ms Smith said: “There is no disguising the fact these figures make for awful reading with the impact on jobs and livelihoods across the region.

“Industry and Government must now leave no stone unturned to retain as many key skills as possible within the sector to ensure it is in a position to effectively recover when growth eventually returns, which at some point it will.”

According to the survey, output and order levels reached balances of -60% and -65% respectively which are unprecedented record low levels. This was reflected in both UK and export order cutbacks of -55% and -50% respectively with a knock on impact on investment being slashed with a balance of -47%.

Despite the Government support schemes such as the Job Retention Scheme, Make UK fears the prospect of significant job losses due to the fall in demand despite the employment balance in the North West at -10% not being as bad as the national figure.

It is forecasting that manufacturing will contract by almost 10% this year (9.4%) before recovering some of this with growth of +6.2% in 2021. It is forecasting the economy overall to contract by 7.8% this year before recovering most of this next year with growth of 7.2%.

Graham Ellis, head of manufacturing at accountancy firm BDO in the North West, added:With output plunging and order books shrinking, many manufacturers in the region have had to ditch their investment plans and rethink their priorities.

“While the short-term support packages offered to date have provided a lifeline, it’s becoming increasingly clear that the Government needs to develop a comprehensive strategy to provide long term stability for the manufacturing sector.”

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