The FT’s Manufacturing Barometer takes the pulse of 55 UK companies across a range of industries. Its latest reading confirms that storm clouds are now well and truly overhead. The survey shows that orders are down, sales are down and expectations about the next six months – also down. On going concerns about demand prospects and reports that lending conditions show few signs of improvement suggest that this area of low pressure is set to be with us for some time.
The survey also reiterates many of the concerns that EEF members have been making – particularly around the need for speed in getting government support schemes out to the market and growing fears about the health of companies in supply chains.
Uncertainty, a lack of demand and cashflow constraints are a toxic mix as far as investment plans are concerned. Companies are considering unconventional measures to hold off on redundancies for as long as they can, but it looks like investment is set to take a hit this year – one reason why we will be looking to the Treasury to provide a temporary increase in investment allowances in the Budget in April.
It wasn’t all bad news. A few manufacturers in the survey have found some shelter in niche markets. But over the past six months the downturn, which hit the consumer and construction related sectors first, has become more widespread and a loss of confidence seems to be percolating through the sector.
EEF’s Engineering Outlook (a survey of around 800 companies) will provide some more detail on how engineering and manufacturing have been faring on Monday 2nd March.