MANUFACTURING SECTOR NEEDS URGENT FINANCIAL SUPPORT AMID CORONAVIRUS CRISIS
The latest Manufacturing Barometer highlights a need for accelerated Government support as SME businesses go into steep decline.
Small to medium-sized (SME) manufacturers are calling for greater and faster financial support from the Government as they confront plummeting sales, production volumes, and the prospect of job cuts amid the ongoing COVID-19 pandemic.
This quarter's Manufacturing Barometer, which surveyed over 600 firms across England, reveals a stark picture of how the virus is affecting industrial confidence, with almost 9 out of 10 respondents predicting a drastic decline in production volumes and a similar number (85%) expecting sales to drop over the next six months.
The report also shows that 55% of firms believe they will need to cut jobs between now and October, despite the business grants on offer and the furloughing scheme designed to boost employee retention.
Unsurprisingly, over 80% of respondents have seen an impact on staff attendance and supply chains due to the Coronavirus outbreak, with HR, importing, and exporting also affected to a lesser degree.
Simon Howes, of SWMAS, 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."
The overwhelming majority of the manufacturing SMEs surveyed (84%) say they require urgent financial support to get through the current climate, with only 16 percent confident that Government is doing enough to help the sector cope with the pandemic. One in four manufacturers also highlighted the need for supply chain support, whilst 22% are looking for help with risk management and strategic planning.
“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 support and we must protect SME manufacturing now to ensure it is ready to spring back into action once the COVID-19 crisis is finally over.” Simon continued. "This crisis has brought home how reliant we have become on overseas supply of strategically critical important items. We must learn from this and re-establish UK production of these things."
On a more optimistic note, the report reflects a positive response from UK manufacturing to support the urgent request for vital medical equipment and PPE. Just over a fifth (21%) surveyed say they have already responded to the Government’s call, with a further 13% willing to look at diversification if they can access advice on how to switch their products and processes. This underlines that manufacturers are already playing a vital role with more willing to step up and do their part in supporting the response to this crisis.
This survey collected responses from SME manufacturing businesses between 25th March and 17th April. Results can be viewed in the National report below: