Manufacturers are shedding jobs at the fastest rate since 1993 but are more confident about future profitability, according to the British Chambers of Commerce’s latest Quarterly Economic Survey.
The survey shows the high levels of redundancies so far this year are expected to continue. `The lagging effect on jobs is increasingly being felt,’ said Ian Fletcher, BCC principal economic adviser.
Manufacturers remain pessimistic about home and export orders, and predict they will have to cut prices over the next quarter.
`The forward orders situation is worse than it was last year,’ said the managing director of one major UK machine tool builder. `We are just having to hang in there.’
But all manufacturers have grown more optimistic about turnover and profits over the coming months, the BCC survey shows.
A separate report predicts that up to 170,000 engineering jobs could be lost over the next two years as the effects of the manufacturing recession work through.
The Engineering Employers’ Federation’s latest quarterly Engineering Trends shows just 13% of firms expect to take on more staff compared with 44% expecting to shed staff.
More job losses are expected during 2000 as companies try to improve productivity. EEF chief economist Alan Armitage said: `The surprise is that job losses have not come faster.’
The report predicts manufacturing output will fall 2.8% in 1999, but recover next year – as long as the value of sterling falls.