Recruitment plans on hold as UK manufacturers experience sharp downturn

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A “very sharp” slowdown in activity and fears over a potential recession have forced Britain’s manufacturers to slash plans to recruit more workers, new figures show.

According to Make UK, despite a positive picture in the first half of the year, the sector is going into reverse. In March, it was reported that manufacturers were seeing a rebound in activity despite ongoing inflationary pressure.

But Make UK, which represents 20,000 manufacturers across the country, has now cut its forecast for growth for 2023, with output set to fall this year as recruitment plans are reversed amid slowing orders.

It said the findings diverge in the aerospace and chemical sectors, which continue to perform very strongly relative to other sectors. Aerospace in particular has benefited from a glut of orders for new aircraft over the last year, as well as a strong rebound in long-haul international travel.

In response to the downturn, Make UK called on the chancellor to introduce measures on skills, digitalisation, productivity and energy efficiency in the upcoming Autumn Statement.

Verity Davidage, a 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.

“While it’s clear the chancellor doesn’t have a financial war chest to try and boost growth, he should use his Autumn Statement to bring forward carefully targeted measures which could make a difference to companies’ efforts to boost skills and productivity. He should use whatever is available to get the best bang for his buck.”

In March, the body said the government needed to draw up a long-term industrial strategy or risk falling behind on the global stage. This came after a survey found that almost 60 per cent of companies thought the government had never had a robust vision for manufacturing.

Richard Austin, national head of manufacturing at BDO, said: “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.”

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