Manufacturers are set to plunge into recession next year as the deteriorating economic conditions at home and abroad exert a “vice-like grip” on the sector, according to a report.
Make UK said increasing costs, tighter monetary policy and weakening consumer demand formed a “perfect storm” facing companies across the UK.
A survey of more than 330 firms by Make UK and BDO indicated that the industry will contract by 3.2% in 2023 following a predicted fall of 4.4% this year.
Make UK warned of the danger of policymakers “sleepwalking” into an acceptance of little or no growth as being normal.
The manufacturing group said that measures needed should include alleviating labour shortages with temporary easements to the migration system and making sure firms have the funds to train and retrain employees by expanding tax exemption for work-related training.
Stephen Phipson, chief executive of Make UK, said: “There is simply no sugar-coating the outlook for next year and possibly beyond. Even for a sector as resilient as manufacturing, these are remarkably challenging times which are testing even the best and most successful of companies to the limit.
“As a result, while the Chancellor has already brought in some welcome measures to help ease the cost pressure on companies in the short term, it may not be too long before we see him having to bring more firepower to ease cost pressures.
“The bigger issue is that the UK risks sleepwalking into an acceptance that little or no growth is the norm.”
Richard Austin of BDO added: “Manufacturing input prices are growing rapidly, so it is little wonder UK manufacturers are having to pass the costs onto their customers in order to remain viable.
“There is little clarity on how the new Government plan to build the right, longer term environment in which the sector can effectively plan.”
Content provided by Radio NewsHub. Originally published on 2022-12-12 05:03:00.