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Wednesday 04th of March 2009
March 2, 2009

UK manufacturing downturn gathering pace


by Kay Murchie
”UK

According to the Chartered Institute of Purchasing and Supply’s (CIPS) index, UK manufacturing has weakened for a tenth consecutive month with the index at a low of 34.7.

The CIPS is estimating that approximately 30,000 factory jobs in the UK are being lost every month as firms slash costs amid a slump in demand.

Roy Ayliffe, Director of the CIPS, said “While the recession initially hit small and medium-sized companies the worst, larger manufacturers - especially those dependent on the automotive and construction sectors - are increasingly struggling.

“And with bigger firms now in the equation, we are seeing jobs slashed at a record rate as firms try to survive the unrelenting market conditions, he added.”

In the meantime, a report published today by the Engineering Employers Federation (EEF) revealed that 140,000 manufacturing jobs will be lost this year as a result of the downturn in the industry.

A survey by the organisation, which questioned 782 companies, found that a slump in output and orders, increasing job cuts, huge constraints on cashflow are being experienced.

The survey forecasts that manufacturing output would decline by 8.6% this year - the worst figure since the recession of the early 1980s.

The EEF described the figures as “grim” and chief economist, Steve Radley, said the last 3 months have been “extremely difficult for manufacturers”.

As a result of the gloomy outlook, employers and the trade union movement are urging the Government to establish a billion-pound fund to provide short-term wage subsidies that will enable more than half a million workers to retain their jobs.

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