Manufacturing SMEs call for clarity on government COVID-19 support

UK manufacturing SMEs are confused about government support and deeply concerned about the future of their businesses, according to the initial findings of the Manufacturing Barometer.

UK Manufacturing SMEs
Hitherbest, Heath Hill Industrial Estate, Heath Hill, Dawley, Telford

Conducted by South West Manufacturing Advisory Service (SWMAS) and the Manufacturing Growth Programme (MGP), the report – which covers over 330 firms across England – shows that almost 9 out of 10 of respondents expect sales to drop over the next six months, whilst more than half predict the need to cut staff  – despite the government’s furloughing scheme being introduced to boost employee retention and preserve businesses.

There also appears to be continued confusion over the business support available. Nearly three quarters of firms questioned either don’t think the assistance being offered is sufficient or are unsure of the help they can access.

Unsurprisingly, almost 90 per cent said that financial support was needed most, followed by overcoming supply chain disruption and detailed business advice on how to cope with the pandemic.

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In total, 80 per cent of businesses questioned said they are either struggling to source materials or have seen reduced orders from customers since the crisis began, whilst just over half of respondents have said that restrictions on exporting and importing is having an impact on their operations.

Commenting on the findings, Simon Howes of SWMAS said: “COVID-19 is already having a significant impact on the majority of SME manufacturers surveyed and many of those who have yet to experience a change are expecting this global health and economic crisis to affect their business over the coming weeks and months.

“86 per cent confirmed they will need financial assistance, yet there is a great deal of uncertainty over the eligibility criteria for business loans and how quickly these can be accessed, if at all.

“Many are also concerned about how paying furloughed staff will affect their cash flow in the short term before government support becomes available. Whilst the government’s initial support package was widely welcomed by industry, there is a need to provide deeper advice and support for manufacturers to help them to adapt and to survive.”

The 13 per cent of manufacturing SMEs who said that their production levels have increased are supplying into the fields currently experiencing a higher than normal demand as a result of COVID-19, highlighting an opportunity for other manufacturers to support their supply chains at this difficult time.

Martin Coates, MD of the Manufacturing Growth Programme, said: “One in five manufacturers have answered the government’s urgent call for additional NHS equipment, but many of those questioned are still unsure whether or not their offer of help will be taken up.

“As the list of products necessary to help fight COVID-19 continues to grow, SMEs should be exploring this in further detail and to find other possible opportunities for their business,” he added.

The Manufacturing Barometer is open until April 17th for other companies interested in having their say