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Sales fall for a third of UK manufacturers in the latest lockdown

08 February, 2021

More than a third of UK manufacturers have seen sales and orders drop since the start of the latest lockdown, according to a new survey by the manufacturers’ association, Make UK. A similar proportion (36.7%) think it will take between 6–12 months for normal trading to return, while 28.9% believe it will take a year or longer. A quarter of the 186 companies surveyed (25.4%) report that they are currently operating at full capacity, while half expect to have recovered to that position by the start of 2022.

Based on the results of the survey, Make UK is calling on the Government to use the upcoming Budget to set out a major long-term industrial and economic strategy, on a scale not seen since the Marshall Plan, to ensure the UK takes advantage of its world-class science base and growth in new technologies. While further short-term tactical measures will be needed to support companies, Make UK believes that there is an urgent need to develop a longer-term strategic vision that sets out how the UK can prosper.

In particular, Make UK believes that the Government must go beyond simply thinking about how we can diverge from the EU, to how the UK can benefit from digital technologies, the innovation derived from academia, and growth opportunities from the transformation to a net-zero economy.

Make UK also wants the Government to support a new Manufacturing Skills Taskforce, to reform the Apprenticeship Levy, to roll out the Made Smarter initiative across all regions, and to introduce a net-zero support package. It believes there should be rewards for businesses that reach green targets, and support for those sectors where transition will be a challenge.

While most manufacturers (61.8%) quizzed for the Manufacturing Monitor survey report that conditions during the current lockdown are similar to the previous two, 24.7% feel that it is better and 13.4% that it is worse.

The survey backs Make UK’s call for the furlough scheme to be extended to at least the end of the third quarter, with more than a third of companies (37.8%) reporting they still have up to 10% of their staff furloughed, and 44.3% saying that they have no employees furloughed.

The survey suggests that most redundancies have already taken place, with two thirds of companies stating that they have no plans to make any redundancies in the next six months.

When asked what measures Government should take in the Budget, the top request (cited by 56.8% of those surveyed) was to waive business rates and cut costs, followed by extending the Job Retention Scheme (47.5%), making a longer-term commitment to increase investment allowances (45.4%), and offering bigger fiscal incentives for r&d, including doubling the r&d tax credit (35.5%).

Make UK’s latest Manufacturing Monitor survey reveals that UK manufacturers want the Government to waive business rates and cut costs

“We are at a crossroads,” says Make UK CEO, Stephen Phipson. “There are clearly short-term issues to address, including fixing border delays, and Budget measures to ease industry’s cost base to help companies through the rest of this year.

“Looking to the long term, however, we need to lift our horizons to how we can transform the economy,” he adds. “This will require a different mindset in Government from believing we can achieve growth simply through diverging from EU regulations which have little or no economic significance in the bigger picture.

“Instead we need an industrial strategy and vision on a scale not seen since the Marshall Plan which identifies new technologies and market openings that will benefit from enterprise friendly policies on taxation, research and development, infrastructure and regional investment.

“In particular, Government must work with industry to harness our thriving, world-class academic science and innovation base and put in place a process whereby this can be commercialised, especially as we move to a net-zero economy,” Phipson concludes. “Now we have left the EU, this will require a drive and vision to ensure we build new markets in the UK, together with support for exporters to help them compete in global ones overseas.”

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