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Plans by manufacturing firms to recruit more staff have stopped amid a slowdown in orders, new research suggests.
A survey of more than 300 manufacturers showed they were ‘battening down the hatches’ amid warnings of a sharp slowdown in activity and a potential recession.
Make UK and business advisory firm BDO said their study showed that a positive picture of the first half of the year has gone sharply into reverse.
As a result, Make UK has cut its manufacturing growth forecast for 2023 with output set to fall this year, while the forecast for next year is within the margins of no growth at all.
Three out of four companies said they believe policy incentives elsewhere, such as in the EU and US, were making UK investments harder to justify.
More than half of respondents said they have withheld investment in the last two years as a result of the uncertain business environment, and a similar number said they would have invested more in the last five years or, in the future, if there was a formal industrial strategy in place.
Verity Davidge, policy director at Make UK, said: ‘Manufacturers are seeing a very sharp slowdown in activity as the potent cocktail of rising interest rates, cost of living and slowing overseas markets bites hard.
‘As a result, they are now battening down the hatches in the expectation that the next year is going to be anaemic at best and, potentially, much harder.’
Richard Austin, of BDO, added: ‘Manufacturers are entering the final quarter on an increasingly unsteady footing. In the absence of an overarching industrial strategy from government, businesses will be forced to cut back, protect margins and focus on building on operational efficiencies over the next few months.’
By Alan Jones, PA Industrial Correspondent
source: PA
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