Job axe warning from West Midlands manufacturers

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Manufacturing firms across the West Midlands have warned they will need to cut jobs over the next six months in the wake of the coronavirus crisis.

New research published today says 61 per of manufacturers feel they will have to axe roles between now and October despite the business support grants on offer and the furloughing scheme designed to boost employee retention.

This is the highest number of all the areas surveyed in England in the newly published Manufacturing Barometer report, conducted by the Manufacturing Growth Programme and South West Manufacturing Advisory Service.

The report, which is carried out among small- and medium-sized companies, also said businesses were calling for greater and faster financial support from the Government as they confront plummeting sales and production volumes.

Other key findings include 85 per cent of respondents experiencing a drastic decline in production volumes while nine out of ten said they were expecting sales to drop over the next six months.

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Eighty-three per cent of those surveyed said they required urgent financial support to get through the current climate with only 13 per confident the Government was doing enough to help the sector cope with the pandemic.

A total of 61 per cent of respondents said they planned to reduce future investment in plant and machinery and only 12 per cent were anticipating an increase in capital expenditure compared with 51 per cent in the previous Manufacturing Barometer at the start of the year.

Martin Coats, managing director of the Manufacturing Growth Programme, said: “Covid-19 is having a huge impact across the West Midlands 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.

“Top of the wish list for SME manufacturers is stronger financial assistance and for the 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 advice and support.

“This crisis has brought home how reliant we have become on overseas supply of strategically critical items.

“We must learn from this and re-establish UK production of these parts and protect SME manufacturing now in order to ensure it is ready to spring back into action once the crisis is finally over.”

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The report did highlight some positive aspects related to the way West Midlands manufacturers had responded to the call for help producing medical and protective equipment for frontline NHS and healthcare staff.

Twenty-one per cent of those surveyed said they have already responded to the Government’s call with a further 14 per cent willing to access advice on how to switch their production lines.

Mr Coats added: “It is no great surprise to see that every indicator for confidence among SME manufacturers appears to have worsened over the last six months due to the impact of covid-19.

“That said, it is heartening to see that many SME manufacturers are adapting to the situation by diversifying their processes and product ranges in all manner of innovative ways.”

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