Industry set for further decline

UK manufacturing is set to contract further despite manufacturers responding better than in previous recessions, according to a report by the Management Consultancies Association (MCA).

The report found that more then three quarters of British consultants expected the sector to shrink further and warned that it would be unable to generate sufficient jobs to offset the 188,000 that are expected to be lost in the industry by the end of the year.

According to the study, the manufacturers will face the challenges of adapting to a new business landscape following the recession. Two thirds of those surveyed believe that demand will be harder to predict in the future, with the majority agreeing that collaboration between manufacturers and retailers will be significant.

The report also claims that inability or unwillingness to invest combined with a lack of funding, innovation and leadership are likely to hinder manufacturers during the recovery.

Alan Leaman, chief executive of the MCA, said: ‘While the worst of the recession may be over for the manufacturing sector, it is important that manufacturers do not take their eye off the ball. There is still much to do to bring the sector back to health in a “new norm” for business that will be fundamentally different to what has gone before.’