Coronavirus update: South West manufacturers fear widespread job cuts as sales and orders plummet

April 8, 2020

Nearly nine out of 10 South West manufacturers expect the coronavirus pandemic to hit their sales over the next six months, with half saying they will need to axe staff to stay in business.

And despite action by the government to support businesses during the crisis, three-quarters of manufacturers in the region believe it is not enough to help them or are unsure how to access it. 

The alarming picture emerges from the initial findings of the latest Manufacturing Barometer survey among small and medium-sized manufacturers in the region and across the UK.

The quarterly survey – the largest of its type in England – is organised by manufacturing sector support group SWMAS (South West Manufacturing Advisory Service) and the Manufacturing Growth Programme (MGP).

While the latest survey remains open until the end of the month, early findings reveal the coronavirus outbreak is already having a devastating effect on the region’s manufacturing sector, with supply chains problems on one side coinciding with a fall in customer demand on the other.

Some 80% are either already struggling to source materials or suffering from a fall in orders. As a result, 87% expect a significant decrease in production volumes.

This, in turn, is likely to have a serious knock-on effect on employment in the sector, with more than half of manufacturers taking part in the survey saying jobs are at risk.

Just over half of respondents also said that restrictions on exporting and importing were hitting their operations,

Worryingly, 86% said they would need financial assistance – yet the survey results reveal a great deal of uncertainty over the eligibility criteria for business loans and how quickly these can be accessed, if at all.

Unsurprisingly, almost 90% said they needed financial support most, followed by overcoming supply chain disruption and detailed business advice on how to cope with the pandemic. 

SWMAS managing director Simon Howes, pictured, said: “COVID-19 is already having a significant impact on the majority of SME manufacturers surveyed and many of those who have yet to experience a change are expecting this global health and economic crisis to affect their business over the coming weeks and months.

“Unlike many sectors, our manufacturing industry cannot be carried out remotely as it relies on physical interaction with machinery and parts.

“Current restrictions and lockdown measures in the UK mean capacity is reduced, and this is reflected in four-fifths of companies seeing a reduction in staff attendance.

“Whether they trade nationally or worldwide, many small and medium-sized UK manufacturers are uncertain of what the future holds.”

He said many businesses were also concerned about how paying furloughed staff will affect their cashflow in the short term before government support becomes available.

“While the government’s initial support package was widely welcomed by industry, there is a need to provide deeper advice and support for manufacturers to help them to adapt and to survive,” he said.

The latest results also show that finding routes to new markets is one way manufacturers can keep their business ticking over when their existing customer base is limited.

Some 13% of manufacturers said their production levels had increased as they were supplying sectors experiencing higher-than-normal demand as a result of the crisis, such as retail or healthcare – highlighting an opportunity for other firms to support their supply chains at this difficult time.

Manufacturing Growth Programme managing director Martin Coates said one in five manufacturers had answered the government’s urgent call for additional NHS equipment – but many of those questioned were still unsure whether or not their offer of help will be taken up.

“As the list of products necessary to help fight Covid-19 continues to grow, SMEs should be exploring this in further detail and to find other possible opportunities for their business,” he added.

The initial findings from the latest Barometer are a huge contrast to the previous quarter results which showed that confidence among the South West’s small and medium-sized manufacturers had bounced back following the breaking of the Brexit impasse following December’s General Election.

The latest Manufacturing Barometer is open until Friday, April 17 for other companies interested in having their say. To take part go to

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