North West manufacturers recover but worries persist

According to a major survey published today by Make UK and BDO, orders and output among manufacturers in the North West are recovering but says a no-deal Brexit would be disastrous. Tony McDonough reports

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Manufacturing is showing signs of recovery from the COVID-19 crisis

 

North West manufacturers are showing signs of recovery from the COVID-19 crisis but further lockdowns and issues over Brexit continue to cast a cloud over the sector.

According to a major survey published today by Make UK, the manufacturer’s organisation, and accountancy firm BDO, balances for orders and output in the North West were reported at -29% and -6% respectively.

While this is still in negative territory, it represents a significant improvement on the last quarter with the figure for output in particular some way ahead of the national picture. The impact on the aerospace and automotive sectors remains severe but the North West has a significant presence in the pharmaceuticals and chemicals sectors which to date has offset some of the toughest impact of the pandemic.

In response to the difficult trading environment, the prospects for recruitment and investment are both flat in the region but this also represents a significant improvement on the very negative outlook in the last quarter and a better picture than the national average.

Make UK is now forecasting that manufacturing output will fall by almost 11% (10.9%) this year while it has downgraded its forecast for recovery in 2021 by more than a full percentage point from 6.2% to 5.1%. GDP is forecast to fall by -8.5% this year before recovering by +10.1% in 2021.

June Smith, region director for Make UK in the North, said: “Manufacturing has begun to climb away from the abyss that it stared into earlier in the year. But, make no mistake it is going to be a long haul back towards normal trading conditions, with talk of a V shaped recovery nothing more than fanciful.

“Having emerged from three years of political uncertainty at the end of last year, increasing talk of a final ‘no deal’ exit from the EU would be a final nail in the coffin for many companies.

“If we are to avoid this and, the avalanche of job losses that would follow in already hard hit areas and sectors, it is essential that the first step towards a fuller recovery is provided by a comprehensive trade agreement with the EU.”

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