Here’s what manufacturers want from the Government

The call was made on the back of the Make UK/BDO Q2 Manufacturing Outlook survey which shows the sector hit record lows in output, falling to levels beyond anything seen in even the financial crisis.

Make UK has already called on the Government to step in with direct support for key strategic sectors of manufacturing, in particular aerospace, automotive and steel where the region has a strong presence, as well as set up a national skills taskforce.

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

According to the survey, output and order levels reached balances of -57 per cent and -52 per cent respectively, which are unprecedented record low levels.

This was reflected in both UK and export order cutbacks of -52 per cent and -20 per cent respectively, with a knock-on impact on investment being slashed with a balance of -37 per cent.

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 Yorkshire at -29 per cent not being as bad as the national figure.

As a result of the impact, Make UK is forecasting that manufacturing will contract by 9.4 per cent before recovering some of this with growth of 6.2 per cent in 2021.

It is forecasting the economy overall to contract by 7.8 per cent this year before recovering most of this next year with growth of 7.2 per cent.

Make UK regional director for the North June 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.”

Steve Talbot, head of manufacturing at BDO in Yorkshire, 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.

“This could include direct support for some of the country’s largest manufacturers that so many small and mid-sized suppliers rely on, in addition to new incentives to encourage investment in digital transformation and productivity.

“With Covid-19 causing instability in global supply chains and uncertainty surrounding our future trading relationships, the UK will become more reliant than ever on its manufacturing sector.

“Now is the time for the Government to step up and show its support.”