Manufacturing exports slump to lowest level in three years

Britain’s manufacturers are calling on the Government to work with industry and take whatever steps are necessary to mitigate the impact of coronavirus on supply chains on the back of a survey showing exports have slumped to their lowest level in three years.

The Q1 Manufacturing Outlook survey published by Make UK and business advisory firm BDO LLP, taken before the recent escalation of the economic situation, confirms that the sector had ground to a standstill at the end of 2019, as the stockpile from a potential October EU exit wound down.

 While the domestic picture had begun to improve slightly, exports had already fallen sharply in response to a downturn in world trade, a situation likely to be exacerbated by current events.

In addition, a separate snap poll of companies conducted by Make UK showed that 36 per cent of companies say that EU customer sentiment has worsened since exiting the EU, indicating that European customers are now looking away from the UK, further threatening exports to the UK’s major markets.

Make UK and BDO warned the true impact of the coronavirus may not have been recorded but the next few weeks should shed some light on how the sector is responding to disruptions that are set to send shockwaves through industry supply chains.

Seamus Nevin, Chief Economist at Make UK, said: “After the rollercoaster ride of the last twelve months and a series of stockpiling highs and investment lows the election results 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.”

“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.”

Tom Lawton, Head of Manufacturing at BDO, 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.”