Page 6 - Industrial Technology October/ November 2020 issue

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Manufacturing demand slumps

as activity continues to be weak

BUMPY ROAD AHEAD FOR MANUFACTURERS WITH PACE OF OUTPUT DECLINE EXPECTED TO ACCELERATE

anufacturing output volumes in the three to stabilising trading conditions for manufacturing firms manufacturers had reported that total new orders had
months to November fell at their slowest will be getting the pandemic under control through further stabilised, following a survey-record pace of decline last
pace since September 2019, but the investment in mass testing, ensuring a seamless test and quarter. The decline in employment had slowed from the
Mpipeline for activity – including output trace system, and an efficient vaccine rollout.” last quarter, the cut in headcount among SME
expectations and order books – weakened in October. Tom Crotty, group director at INEOS and chair of the CBI manufacturers remained significant. Business sentiment
That’s according to the latest CBI monthly Industrial Manufacturing Council, said: “These results show what we was roughly unchanged in the quarter to October,
Trends Survey. The survey of 277 manufacturers found already know – that manufacturers up and down the following a slight recovery in July.
that output volumes declined in 9 of 17 sub-
sectors, with the headline drop in output
driven by the aerospace manufacturing sub-
sector. Total and export order books both
weakened in October, remaining substantially
weaker than their long-run averages.
Looking ahead, firms anticipate that
output will decline at a slightly faster pace
over the next three months. This marks a
worsening in expectations compared to last david.b@atlas.co.uk
month’s survey. Manufacturers also expect
output prices to fall over the next three
months.
Anna Leach, CBI deputy chief economist, said: country are continuing to face very difficult circumstances Alpesh Paleja, CBI lead economist, said: “The second
“Output volumes have declined at their slowest pace in as we move into the winter. Looking ahead, manufacturers national lockdown will inevitably mean that prospects are
over a year in our November survey. But order books have have a crucial role to play in working with the government now looking bleaker. However, the step up in Government
softened again as global demand has been hit by to build its green industrial revolution, improve productivity support is welcome. In particular, extending the Job
intensified lockdowns, and manufacturers have trimmed and level-up regions. Government support for the sector has Retention Scheme further will give companies the certainty
their expectations. Firms have done all they can to adapt therefore been – and will continue to be – vital in keeping and stability they need to help safeguard jobs. If signs of
their operations to the current conditions, but pressure firms going through the crisis.” additional strain are growing among SME manufacturers
remains intense. The extension of government support – In the three months to October, following July’s record and their supply chains, the Government may need to
notably the Job Retention Scheme – is very welcome. Key decline and prior to the November lockdown, SME think about more tailored support.”

6 INDUSTRIAL TECHNOLOGY • October/November 2020