UK manufacturers are cutting their recruitment plans after being hit by a slowdown in orders as a downturn looms, a new survey shows.
Britain’s manufacturers are “battening down the hatches” amid a sharp drop in activity, according to the latest quarterly data from Make UK, which represents manufacturers, and the business advisory firm BDO.
Their manufacturing outlook survey shows that factory recruitment plans are weakening significantly for first time since the EU referendum in 2016, due to a slowdown in orders from domestic and overseas customers.
Make UK has cut its forecast for 2023, predicting output will fall by 0.5% this year.
“Manufacturers are seeing a very sharp slowdown in activity as the potent cocktail of rising interest rates, cost of living and slowing overseas markets bites hard,” said Verity Davidge, policy director at Make UK.
“As a result, they are now battening down the hatches in the expectation that the next year is going to be anaemic at best and, potentially, much harder,” Davidge added.
Recent surveys of purchasing managers have shown that the UK manufacturing industry’s downturn deepened as a weakening economic backdrop led to falls in output and orders in August.
Almost three-quarters of firms surveyed by Make UK and BDO believe that incentives offered overseas, such as the US Inflation Reduction Act, make it harder to justify investing in the UK.
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Heather Boushey, a member of the White House council of economic advisers, has told the Guardian that countries including the UK must ramp up green investment to reboot economic growth, boost energy security and protect against future inflation shocks.