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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