Manufacturers have slashed their growth forecasts for next year amid “gathering storm clouds” for industry.
Make UK said a survey of firms suggested growth in the sector of just 0.6% in 2023, down from 1.7% as recently as June.
The manufacturers’ organisation has cut its forecast for economic growth from 3.6% this year to 0.3% in 2023.
Make UK called on the Government to bring forward a “shock and awe” package of policy measures in its mini-Budget on Friday in line with those seen during the worst points of the pandemic to help protect viable companies and avert significant job losses.
Stephen Phipson, chief executive of Make UK, said: “Whilst industry has recovered strongly over the last year, the storm clouds are gathering in the face of eyewatering costs and a very difficult international environment.
“This threatens to shatter expectations of a sustained recovery from the pandemic and put many perfectly viable businesses at risk.
“As a result, urgent and decisive action is needed by the Chancellor to help shield the economy and protect companies and jobs, otherwise we risk a permanent scarring of the economy.”
Richard Austin of business advisory firm BDO, which helped with the research among 354 companies, said: “Manufacturers continue to see activity slow, with growing inflationary pressure resulting in uncertainty for the sector.
“We are seeing input prices at near record levels for the second quarter in a row as profit margins continue to fall. There is great uncertainty across all business sectors, and we welcome Government support to help with soaring energy prices.
“We hope the Government recognises the particularly uncertain and vulnerable position manufacturers and other energy-intensive industries find themselves in with respect to energy bills, which could stall momentum at a time when the sector needs investment.”