Manufacturers call for furlough scheme extension as firms eye job cuts

Make UK's survey found that the number of companies planning to make redundancies in the next six months has risen to 53%.
Henry Saker-Clark, PA City Reporter

MANUFACTURERS have called on the UK Government to extend the job retention scheme by six months as they warned of job losses "on a scale not seen since the 1980s".

Trade group Make UK said the Government should extend the furlough scheme as new research revealed that more than half of firms in the sector plan to cut jobs by the end of the year.

It called for an extension of the scheme for strategic industry sectors to protect highly skilled jobs as the coronavirus pandemic continues to cast a shadow over manufacturing.

The call came as the organisation's latest survey revealed the number of companies planning to make redundancies in the next six months has risen to 53%.

It said this represents a continued sharp rise in firms' intent to cut jobs over the past two months, rising from 25% and 42% in the two previous surveys.

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"There is no disguising the fact these redundancy plans make for very painful reading," said Stephen Phipson, chief executive of Make UK.

"As well as the distressing personal impact on livelihoods across the UK, industry cannot afford to lose these high-value skills which will be essential to rebuilding our economy and investing in the industries of the future."

Make UK particularly highlighted that measures should be put in place to protect the aerospace and automotive industries.

The sectors have seen thousands of jobs put at risk since the start of the pandemic, with the likes of Rolls-Royce, Meggitt and Jaguar Land Rover announcing major cuts.

Almost a third of companies (32.3%) are planning to make between 11% and 25% of employees redundant, according to the monitor.

It also reported that the proportion of companies expecting a return to normal trading to take 12 months or longer has risen from just under a third in the previous survey to 42%.

Mr Phipson added: "At present, the prospect of a V shaped recovery for industry seems remote.

"Therefore, if we are to mitigate the worst impact of potential job losses, Government must extend the furlough scheme for key strategic sectors to provide them with vital breathing space.

"In addition, Government should consider measures similar to those introduced by competitors to boost demand in the aerospace and automotive industries in particular."

Make UK’s recent regional outlook suggested that the industry in Northern Ireland had taken a greater hit from Covid-19 than other parts of the UK.

The survey showed output was down 86 per cent in the second quarter, compared with 56 per cent across the UK as a whole. Orders among manufacturers in the north fell 71 per cent, well below the 53 per cent fall for the UK.

Ulster Bank’s latest purchasing managers’ index did hint at some tentative signs of recovery for June. The survey suggested that the manufacturing sector returned to growth last month, reporting the first expansion in output in eight months.

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