UK manufacturing downturn gathering pace

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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