Manufacturers ask government to step in to limit coronavirus damage

Manufacturers are urging the UK government to take action to help limit the damage caused by the coronavirus pandemic after research showed that exports have slumped to their lowest level in three years.

A survey of more than 300 companies by manufacturers’ body Make UK and business advisory firm BDO, carried out before the recent escalation of the coronavirus outbreak, indicated the sector had ground to a standstill at the end of 2019. Since then, while the domestic picture had begun to improve slightly, exports had already fallen sharply in response to a downturn in world trade, a situation likely to be exacerbated by current events.

A separate snap poll of more than 100 companies by Make UK (formerly known as EEF) indicated that more than a third believed EU customer sentiment had worsened since Brexit.

The results showed that European customers were looking away from the UK, further threatening exports to the UK’s major market, according to Make UK, which claims to represent about 20,000 businesses employing almost 1 million workers.

Seamus Nevin, its chief economist, said: “After the rollercoaster ride of the last 12 months and a series of stockpiling highs and investment lows, the election result had at least provided some degree of political certainty and a prospect of a return to cyclical economic normality – but the escalation of coronavirus is likely to knock that off course.

“Even before the current situation, the shocking drop in exports could not have come at a worse time ahead of potentially difficult trade talks where the clock is running down fast. It is now vital that government works with industry to limit the damage to industry and take whatever steps are necessary.”

Last week, official figures showed that GDP growth in the UK flatlined in January before the virus hit Europe, adding to fears that the economy is in a weak position heading into what could be the worst phase of the outbreak. The Office for National Statistics said there had been “yet another decline in manufacturing, particularly the drinks, cars and machinery industries”.

Tom Lawton, the head of manufacturing at BDO, said that as coronavirus fears took hold, and with the potential impact on the sector’s crucial supply chains largely unknown, “businesses should be preparing themselves for more volatility this year”.

He added: “The dramatic fall in exports only exacerbates the challenges to come. There is no doubt that the sector needs the government to step up and deliver a clear and supportive industrial strategy to help navigate the choppy waters ahead.”

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