SME manufacturers in the South West are calling for greater and faster financial support from the Government as they confront plummeting sales, profits and production volumes amid the ongoing Covid-19 pandemic.
The new South West Manufacturing Barometer reveals a stark picture of how the virus is affecting industrial confidence and future predictions around safeguarding jobs across the region.
Conducted by South West Manufacturing Advisory Service (SWMAS) and the Manufacturing Growth Programme (MGP), the report shows that well over 80% of SME manufacturers expect sales to drop over the next six months, while eight of out of 10 respondents have experienced a fall in production volumes since coronavirus forced the UK into lockdown.
Meanwhile, more than half (54%) of manufacturing firms in the South West believe they will need to cut jobs in the next half-year, despite the rollout of the Government’s business support package which includes access to grants and its furloughing scheme to boost employee retention.
Almost half of firms (49%) are expecting to reduce investment in plant and machinery over the next six months, whereas in January, only 10% were planning to lower their spend in these areas. In fact, over half (54%) were planning future investment at the beginning of this year.
The Manufacturing Barometer also shows that more than 85% of SME manufacturers in the South West have seen an impact on staff attendance due to the Coronavirus outbreak, while more than eight out of 10 say their supply chains have also been affected.
Simon Howes, of SWMAS, said: “Covid-19 is having a huge impact across the region’s economy but it is particularly problematic for our sector as manufacturing cannot be carried out remotely, relying as it does on physical interaction with machinery and parts.
“Current restrictions and the ongoing lockdown measures mean that capacity is reduced, so therefore the vast majority of South West businesses surveyed have reported a fall in production volumes.
“Some 80% of the firms who responded also told us that financial support is what they need most to survive the crisis, with only 19% believing that the Government is doing enough to help the sector to cope with the pandemic.
“Meanwhile 17% of firms highlight the need for both supply chain support and help with risk management and strategic planning.
“Top of the support wish list for SME manufacturers is financial assistance and for the Government to go ‘faster and further.’ Although the existing package of measures has been welcomed, there remains a pressing need for a deeper level of sector-specific advice and support. SME manufacturing must be protected now to ensure it is ready to spring back into action once the Covid-19 crisis is finally over.
“The Covid-19 pandemic has also brought home how reliant we have become on overseas supply of strategically critical important items. We must learn from this and re-establish UK production.”
The Manufacturing Barometer, which is the largest survey of its type in England, also reflects a positive response from UK manufacturing to the urgent request for vital medical equipment and PPE.
How to contact William Telford and Business Live
Business Live's South West Business Reporter is William Telford. William has more than a decade's experience reporting on the business scene in Plymouth and the South West. He is based in Plymouth but covers the entire region.
To contact William: Email: william.telford@reachplc.com - Phone: 01752 293116 - Mob: 07584 594052 - Twitter: @WTelfordHerald - LinkedIn: www.linkedin.com - Facebook: www.facebook.com/william.telford.5473
Stay in touch: BusinessLive newsletters have been re-designed to make them even better. We send morning bulletins straight to your inbox on the latest news, views and opinion in the South West. Get our breaking news alerts and weekly sector reviews too. Sign up now - it's free and it only takes a minute. To sign up for Business Live's daily newsletters click here.
And visit the Business Live South West LinkedIn page here
In the South West just over a fifth – 22% – of companies surveyed have already responded to the Government’s call, with a further 7% looking for advice on switching their production lines and get involved.
Meanwhile a number of firms say they are adapting their processes and products in order to navigate their way through the crisis.
“Considering the impact that Covid-19 continues to have on the UK economy, it is no great surprise to see that every indicator for the South West’s SME manufacturers has worsened over the last six months,” said Mr Howes.
“However, it is heartening to see that many businesses are adapting to the situation by diversifying their processes and product ranges in all manner of innovative ways.”
