UK manufacturers warn of slow recovery from coronavirus

More than a third of UK manufacturers have warned that it will take over a year to return to normal trading, with bosses increasingly resigned to a long and slow economic recovery rather than a V-shaped bounce back the after the coronavirus pandemic eases.

Britain’s manufacturers have become more pessimistic over the last two weeks, even as the government has sought to ease lockdown restrictions and bring the UK economy on track with a restart “road map” and guidelines about how companies can safely bring workers back. 

According to a survey conducted by Make UK, the group that represents the interests of the sector, the proportion of manufacturing companies that say it will take more than 12 months for normal conditions to return has doubled in the last fortnight, with four-fifths now saying that their orders have fallen as a result of the pandemic.

Over a fifth of companies said orders had more than halved as customers had sharply reined-in activity in response to countries around the world locking down their economies.

“It’s clear that it is going to be a long road back to anything like normal trading conditions and, despite the lockdown beginning to be lifted, there will be a significant impact on companies and jobs for some time to come,” warned Stephen Phipson, chief executive of Make UK.

“If we thought we were in for a long haul before now, then this puts into stark context the reality for many companies over the next year,” he said.

Manufacturers have been forced to lean heavily on government support schemes as a result of the lockdown measures, with a fifth of companies saying that they had furloughed up to half their staff. More than a third said they will wait to see an increase in orders before taking staff off furlough.

Almost a fifth of companies are also planning to increase the number of staff on furlough in the next two weeks, with many bosses expressing relief that the government had extended the job retention scheme until the end of September and had brought in greater flexibility.

The survey, which covered almost 200 companies and was carried out between 4 and 11 May, will add to concerns over the British manufacturing sector. Output fell to below 60 per cent of capacity in April — the lowest level since records began 40 years ago, according to data from the European Commission. On Wednesday the UK’s Office for National Statistics revealed that production had fallen 2.1 per cent in the first quarter.

Ministers have been keen to get the manufacturing sector back to work, with new rules published at the start of the week about how workers could return safely. The Make UK survey found that the vast majority of companies have been operating through the pandemic, but many are working at much reduced levels.

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