Nearly 9 in 10 manufacturers are still operating in some form through the pandemic, but a similar number predict a ‘drastic’ decline in production over the coming months, according to new polls.
Make UK’s first COVID-19 Manufacturing Monitor reveals that 74 per cent of North West manufacturers have experienced a decrease in orders since COVID-19 took hold - slightly below the overall UK average of 81 per cent. Across the UK, one in five companies have seen orders plummet by more than half.
The overwhelming majority of companies (86.5 per cent) are continuing to operate in some form, although most have had to furlough staff. Taking staff off furlough is likely to be a prolonged process - over a quarter of those surveyed said they will take a phased approach to bringing their employees back, and a third are planning to wait until orders increase again.
A separate national survey of 600 SME manufacturers, conducted by the South West Manufacturing Advisory Services (SWMAS), found that almost 9 in 10 were expecting a “drastic decline” in production volumes over the next six months.
More than half of those surveyed (55 per cent) said they may need to cut jobs between now and October, even with the government furlough scheme in place. Over 80 per cent said COVID-19 had impacted their supply chain, and the majority also plan to reduce future investment in plant and machinery.
Simon Howes, of SWMAS, explained:
“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.
"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.”
The vast majority (84 per cent) of SMEs surveyed by SWMAS said their most urgent need was for financial support. A quarter also said they required help with their supply chain, and 22 per cent required support with risk management and strategic planning.