Cash, Credit and Continuance
25.11.2021
Britain's manufacturing industry is facing an unprecedented combination of a post-Covid credit, cash and costs crunch.
Already facing the burden of repaying debts incurred in the battle to weather the impact of the pandemic, manufacturers are now grappling with the demands of an economic recovery hampered by disrupted supply chains and mounting skills shortages.
This is sparking a sharp inflationary spiral that threatens to reach a level that would prove to be a tipping point for the business model of many, while companies are also facing a liquidity squeeze as customers and suppliers cling to cash or change their payment terms.
As a result, for almost half of companies, their cash position is worse now than at any point since the pandemic began, with the prospect of having to take on yet more debt to maintain normal operations or provide growth capital.
Industry is facing the perfect storm with a raft of rapidly escalating costs combined with significant levels of debt which many companies took on as a precautionary measure just to stay afloat.
Manufacturers are facing a variety of headwinds from staff shortages, supply chain disruption, soaring energy prices and an increased debt burden post-Covid. Considering the position today, rapidly implementing plans to address underperformance is going to be crucial to ensure manufacturers emerge post-pandemic in a strong viable position.
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