Plunging sales, falling production volumes and the prospect of job cuts have prompted SME manufacturers to call for greater and faster financial support from the government.
These are the stark findings of the latest Manufacturing Barometer, a survey of over 600 firms across England that has revealed how the Covid-19 pandemic is affecting industrial confidence. It found almost 9 out of 10 respondents predicting a severe decline in production volumes and 85 per cent expecting sales to drop over the next six months.
Conducted by South West Manufacturing Advisory Service (SWMAS) and the Manufacturing Growth Programme (MGP), the report also shows that over half (55 per cent) of firms believe they will need to cut jobs between now and October, despite the business grants on offer and furloughing.
In total 84 per cent say they require urgent financial support to get through the current climate, with 16 per cent confident that the government is doing enough to help the sector cope with the pandemic.
In a statement, SWMAS’ Simon Howes said: “COVID-19 is having a huge impact across the UK economy, but it is especially problematic for our sector as manufacturing cannot be carried out remotely, relying as it does on physical interaction with machinery and parts.
“Current restrictions and the ongoing lockdown measures mean that capacity is dramatically reduced, therefore the majority of businesses are reporting an unprecedented fall in production volumes.
“Top of the wish list for SME manufacturers is stronger financial assistance and for government to go ‘faster and further’. While the existing package of measures has been welcomed, there remains a pressing need for a deeper level of sector-specific advice and support.
“This crisis has brought home how reliant we have become on overseas supply of strategically critical items. We must learn from this and re-establish UK production of these parts and protect SME manufacturing now, in order to ensure it is ready to spring back into action once the COVID-19 crisis is finally over.”
More positively, just over a fifth (21 per cent) surveyed say they have responded to the government’s call for medical equipment and PPE, with a further 13 per cent willing to access advice on how to switch their production lines.
Other key finding in the Manufacturing Barometer, include:
84 per cent of SME manufacturers have seen an impact on staff attendance due to the Coronavirus outbreak, with 82 per cent saying that their supply chains have also been affected
Over half of respondents plan to reduce future investment in plant and machinery
13 per cent of firms are anticipating an increase in capital expenditure, compared with 51 per cent in January 2020’s Manufacturing Barometer
A quarter of manufacturers highlight the need for supply chain support, whilst 22 per cent are looking for help with risk management and strategic planning