Yorkshire firms begin long road to recovery

According to the survey, Yorkshire output remained flat (although better than the national average), but total orders improved significantly, in particular domestic orders which registered a very positive balance of plus 13 per cent, substantially better than the national picture which is still in negative territory.

Yorkshire exports also increased significantly and are ahead of the national picture.

However, despite this more positive picture the outlook for employment and investment remains subdued as companies control costs and manage the debt many have accumulated since the start of the crisis.

Overall, business confidence among Yorkshire manufacturers has risen indicating that they see a brighter outlook for next year.

The survey showed the brutal impact of the pandemic with the UK manufacturing sector forecast to see a 12 per cent drop in output nationally this year, while Make UK has also substantially downgraded its growth forecasts for the sector overall for 2021.

The firm said a bumpy road lies ahead for the UK as a whole, with a darkening outlook for exports ahead of the final departure of the UK from the EU, with the motor vehicles sector in particular especially fearful of the potential impact of any tariffs from no-deal.

June Smith, region director for Make UK in the North, said: “Manufacturing has stepped back from the abyss that it stared into earlier in the year.

“But, make no mistake it is going to be a long haul back, with talk of a V shaped recovery nothing more than fanciful. However, having endured over four years of political uncertainty, combined with the pandemic many in industry are feeling like an exhausted boxer in the final round of a bout, with a no-deal exit from the EU potentially landing a knockout blow.

“Should this happen, the nascent recovery is likely to go into reverse, with significant damage to manufacturing and job losses following in already hard hit areas and sectors.

“It is essential that the first step towards a fuller recovery is provided by a comprehensive tariff and, quota free, trade agreement with the EU with a sensible range of easements to allow business some time to adapt.”

Steve Talbot, head of manufacturing at BDO in Yorkshire and the Humber, added: “After a torrid year, manufacturers who rely on Continental supply chains and export markets now face a race against the clock to prepare for the end of the transition period.

“The prolonged negotiations with the EU have made this far more difficult than it should have been. Manufacturers are now desperate for greater clarity so that they can be released from the post-referendum paralysis which has made it nigh-on impossible to take long term decisions.”

In response to the continued impact of the pandemic on the sector and the fact recovery is likely to now be more drawn out, Make UK has substantially downgraded its forecasts for manufacturing growth nationally to just 2.7 per cent in 2021, down from 5.1 per cent. GDP is forecast to contract by 11.3 per cent in 2020 and grow by 5.4 per cent in 2021.