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May 2020 comment for PWE

21 May, 2020

If a week is a long time in politics then the last couple of months have felt like a lifetime. At the time of writing in week seven of the lockdown it’s clear that for Britain’s manufacturers it’s going to be a long way back towards anything like normality, whatever that new normality will be. At the start of May Make UK published it’s first COVID 19 Monitor showing that industry had experienced a collapse in demand as the impact of the global lockdown due to coronavirus hammers home with a warning that conditions are unlikely to return to anywhere near normal for some time.

 We also warned that the extent of the fall is likely to mean that the recent Office for Budget Responsibility (OBR) forecast of a 55% fall in manufacturing output in the second quarter is likely to be an underestimate as things stand.

 Furthermore, the extent of furloughing which has taken place within the sector and, the prospect that a significant number of companies will not take staff off furlough until they see orders increase, means the Government will have to consider extending some form of job retention plan beyond the end of June when the current scheme is due to finish.

 According to the survey some four fifths of companies had seen their orders decrease with a significant number saying their orders had fallen by a half, while a similar number of companies had furloughed staff. The forward looking indicators showed that most firms felt it would be at least twelve months before trading conditions were normal with a third of companies only aiming to take staff off furlough once they start to see orders increase.

Looking at these conditions it’s likely that we will continue to successfully work with Govt on schemes to support companies through this crisis and also an extension in some form of the Job Retention Scheme which we were successful in calling for. Protecting jobs and livelihoods at this time is a critical factor for Make UK and we’ll continue to do everything in our power to support the sector through this difficult period.

By Stephen Phipson, Chief Executive of Make UK

First published in Drives & Controls' sister publication, Plant & Works Engineering:

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