Government urged to take ‘whatever steps necessary’ on coronavirus impact after export slump

Article Source: IMechE

The government must work with industry and take “whatever steps are necessary” to mitigate the effects of the coronavirus on manufacturing, an industry organisation has said, after a survey showed exports at their lowest level in three years.

The manufacturing sector “ground to a standstill” at the end of 2019 as the stockpiles from a potential exit from the European Union in October wound down, Make UK said. The body’s Q1 Manufacturing Outlook survey, published with BDO LLP, found that output fell sharply on the back of weak orders and stockpiles dwindling.

The impact of coronavirus, which has affected worldwide supply chains, is now a major concern for UK industry.

“After the rollercoaster ride of the last 12 months, and a series of stockpiling highs and investment lows, the election result had at least provided some degree of political certainty and a prospect of a return to cyclical economic normality, but the escalation of coronavirus is likely to knock that off course,” said Seamus Nevin, chief economist at Make UK.

“Even before the current situation the shocking drop in exports could not have come at a worse time, ahead of potentially difficult trade talks where the clock is running down fast. It is now vital that government works with industry to limit the damage to industry and take whatever steps are necessary to safeguard skills in particular.”

With trade negotiations still to come, the new survey found evidence of EU customer sentiment “turning away from the UK”.

Manufacturing is forecast to contract by 2.1% in 2020, Make UK said.

The head of manufacturing at BDO, Tom Lawton, said: “As coronavirus fears take hold and the impact on the sector’s crucial supply chains remains largely unknown, businesses should be preparing themselves for more volatility this year. 

“The dramatic fall in exports only exacerbates the challenges to come. There is no doubt that the sector needs the government to step up and deliver a clear and supportive industrial strategy to help navigate the choppy waters ahead.”

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