Crunch tightens the noose on manufacturing

Posted on 2 Mar 2009 by The Manufacturer

The latest survey from the EEF has dispelled any hopes of a quick revival for UK manufacturing and reveals 140,000 people in the industry are now likely to lose their jobs in 2009.

The first quarterly survey from the manufacturers’ organisation of this year also found historically low figures for output and orders – they are -39% and -54% respectively. A weakened pound has done no favours for exporters; orders from overseas are down to -43% from -10% in quarter four of 2008. And domestic orders continue to flail too, down to -54% from -26% last time around.

Employment intentions are down to -37%, from -13% last survey, and a balance of 45% of companies will now curtail investment.

“There is simply no hiding the fact these figures make grim reading,” said Steve Radley, EEF chief economist. “The past three months have been extremely difficult for manufacturers, with markets at home and abroad showing severe declines. However, whilst few firms expect things to get better in the near future they are also focusing on making sure they are ready to take advantage of the eventual recovery.

“The priority for government remains getting credit flowing again and helping companies to invest. In addition, there is now an urgent need to support companies in hanging on to the skilled workers they will need for when the upturn comes. Government must now consider all possible avenues to help companies deliver alternatives to redundancy.”

Regionally, the West Midlands is doing the worst and, in terms of size of company, firms with over 200 staff are the most likely to make cuts.

EEF has now downgraded its forecasts for manufacturing output for 2009 as a whole, saying it will now fall by 8.6%. Next year’s recovery predictions are down too, with a pickup of just 0.2% predicted.