More industry support is needed as nearly 90 per cent of West Midlands SME manufacturers admit furloughing staff, according to new research.
A report out today is now asking the Government for further support if small manufacturers in the West Midlands are going to overcome the delay in volumes returning as a result of the lockdown and ongoing impact of covid-19.
The latest Manufacturing Barometer, one of the largest survey of SME manufacturers in England, claimed that nearly 90 per cent of firms in the region took the decision to furlough staff.
The survey also suggested that 30 per cent had already made redundancies as they looked to get through the economic shock of the pandemic.
Almost half of respondents (46 per cent) indicated they expected further losses before the end of this year as the job retention scheme tapered off.
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Conducted by South West Manufacturing Advisory Service and the Manufacturing Growth Programme, the report showed that 44 per cent of West Midlands companies had accessed Coronavirus Business Interruption Loans while less than a quarter had used Bounce Back loans.
Almost a fifth (17 per cent) of management teams have already taken additional financial steps to protect their businesses, including personal loans and re-mortgaging commercial or residential properties.
Martin Coats, managing director of the Manufacturing Growth Programme, said: “Nearly two thirds of manufacturers have told us they are either just surviving or recovering and this, along with the other data, tells us there is an urgent need for further business support which the Government could help with.
“Industry is very resilient but it is very difficult to plan for sales stopping overnight across numerous sectors and then you’ve got the added complications of supply chain interruptions and trying to organise factories that are covid-19 secure.
“The furlough scheme has protected thousands of jobs but the Government may have to consider additional support until sales and revenues are more consistent or start to reflect levels seen prior to the pandemic.”
Other findings from the latest Manufacturing Barometer included 89 per cent of respondents reporting a decrease in sales over the past six months and 53 per cent reduction in their capital spend.
More than a third (34 per cent) are predicting an increase in sales over the next six months, compared with five per cent in the last survey, with the same number expecting a rise in profits going forward.