Britain’s manufacturers have become increasingly pessimistic about a return to normal trading conditions, with the number believing that it will take more than twelve months to return doubling in the last two weeks.
According to the latest COVID-19 Manufacturing Monitor published by Make UK, the manufacturers’ organisation, more than a third of companies (36%) believe it will take more than a year which compares to 17% in the last survey two weeks ago. A further 38% thought it would take between six and twelve months.
Make UK also warned that sales and orders are continuing to fall at an alarming rate while almost a fifth of companies are planning to increase the number of staff on furlough in the next two weeks, backing the Government’s decision to extend the Job Retention Scheme announced earlier this week.
Stephen Phipson, Chief Executive of Make UK, said: “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. 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.
“Government has been very supportive to date with the various schemes to help companies and protect jobs ahead of what is clearly going to be a major downturn. If we are now looking even further into the horizon to fully recover, there might need to be everything on the table to ensure the economy is sustained through this period.”
According to the Monitor almost 90% of companies are continuing to operate in some form. However, over three quarters (78.3%) have seen a decline in sales while more than four fifths (82.5%) have seen orders fall. Both these figures are a slight increase from those reported in the last survey. Furthermore, more than one in five companies have seen orders fall by more than half (22.2%) while a quarter (24.9%) have seen orders fall by between 26% and 50%.
The vital need for the Government’s Job Retention Scheme is highlighted by the fact over fifth of companies (21.9%) have furloughed between a quarter and half of their employees already, with almost a fifth (18.5%) planning to furlough more employees in the next two weeks. Looking ahead, more than a third of companies (34.4%) say they will only take staff off furlough when they see an increase in orders.
The survey of 197 companies was carried out between 4th and 11th May.