Manufacturing Outlook 2020 Q2
The Make UK/BDO Manufacturing Outlook Q2 survey comes on the back of the historic fall in GDP and shows the balance for output reached the lowest level in the thirty year history of the survey, surpassing the previous record lows seen during the worst of the financial crisis. Looking forward the survey shows the prospect for the next quarter and the rest of the year looks little better.
Key findings
- Output plunges to lowest level in 30 year survey history
- UK and export orders at lows comparable to financial crisis
- Employment and investment suffer significant cutbacks
- Just over 10% of companies operating at full capacity
- Industry forecast to contract by almost 10% in 2020
These figures graphically illustrate the severity of the crisis facing manufacturers of all sizes and in all sectors right across the UK. As with all other crises, however, the sector will find a way to recover though there is no disguising the immediate months and perhaps years ahead will be some of the toughest industry has ever faced.
To help get the UK economy and manufacturing back on its feet as we emerge from lockdown it is vital that every part of Government puts its shoulder to wheel with a National Recovery Plan for the short and long term. The Chancellor can lead this charge with an immediate package of measures to provide the consumer and industry with the shot in the arm they need.
With output plunging and order books shrinking, many manufacturers have had to ditch their investment plans and rethink their priorities. While the short-term support packages offered to date have provided a lifeline, it’s becoming increasingly clear that the Government needs to develop a comprehensive strategy to provide long term stability for the manufacturing sector. This could include direct support for some of the country’s largest manufacturers that so many small and mid-sized suppliers rely on, in addition to new incentives to encourage investment in digital transformation and productivity improvements.
With COVID-19 causing instability in global supply chains and uncertainty surrounding our future trading relationships, the UK will become more reliant than ever on its manufacturing sector. Now is the time for the Government to step up and show its support.
Watch the key findings from the report
Make UK & BDO Manufacturing Outlook 2020 Q2 Podcast
The latest BDO/Make UK survey of the second quarter of 2020 has been published. The coronavirus has had a devasting effect on the British economy and manufacturing has taken a huge hit. With both domestic and export orders down, major redundancies announced and some industries like motor manufacturing grinding to a halt. For a detailed analysis of what this all means our latest podcast is a must-listen.About BDO LLP
Accountancy and business advisory firm BDO LLP is the UK member firm of BDO International, which has more than 1,800 offices in 167 countries. We operate from 17 offices across the UK, employing 5,150 people offering tax, audit and assurance, and a range of advisory services.
Manufacturing is a priority sector for BDO and this focus enables us to tailor the wide range of services we offer and apply our skills and knowledge to help clients achieve their objectives.
We provide real solutions to industry issues, utilising our capabilities in everything from sector-specific tax, audit and business advice to patent box, research and development claims and acquisition opportunities to help our clients grow in the UK and overseas.
We have an excellent understanding of the issues affecting UK manufacturers as an industry sector, but we also focus on specific sub-sectors to improve our knowledge and our service to clients. These include: aerospace, automotive, building products, chemicals and pharmaceuticals, electrical, food and drink, industrials, technology and test and measurement.
Manufacturing remains one of the key industries of the UK economy. We are delighted to be able to play an active role in supporting the businesses that operate in this vibrant, changing and challenging sector.