UK manufacturers have called on the Treasury to urgently provide more support amid a poor economic outlook to help “weather the immediate storm”.
Make UK, the manufacturers’ trade body, and consultancy BDO found that costs continued to rise and production opportunities had been stifled.
A survey found that two-thirds of businesses (67.8%) said rising energy costs were causing catastrophic or major disruption. Meanwhile, 71.9% said rising raw material costs posed a similar threat, and 66.8% had been plagued by rising transportation costs.
Finding talent has also proven difficult for businesses, with vacancies at record highs, at 4.1 vacancies per 100 jobs.
Although the Chancellor said earlier this year he would offer support to the sector in the autumn, Make UK warned that help was needed ahead of the summer parliamentary recess so that businesses ‘weather the immediate storm’ .
Make UK has made several recommendations to the government, including scrapping or reducing business rates for the next 12 months and reviewing the effectiveness of business loan schemes implemented during the coronavirus pandemic.
Richard Austin, Head of Manufacturing at BDO, said: “Rapidly rising input costs, soaring energy bills and in some cases anti-inflationary wage settlements have hit margins and frozen plans. of investment.
“There is now a strong case for government action to help UK manufacturers weather the immediate storm and encourage investment for long-term growth.”
Stephen Phipson, Managing Director of Make UK, said: “Clearly some of the factors affecting business are global and cannot be controlled by the UK government alone.
“However, just as he is rightly taking action to protect those most in need, given the rate at which companies are burning their balance sheets just to survive, he must take immediate action to help protect companies from the worst impact of the pandemic. escalating costs and helping to protect jobs.
“The government moved quickly to implement the furlough scheme two years ago; it would be a wasted investment if the jobs saved then were lost now.
A government spokesperson said: ‘We continue to support our manufacturers, including through the tax system with the annual investment allowance and super allowance – the biggest corporate tax cut in history. modern British.
“This is in addition to an increase in the employment allowance, a reduction in the fuel tax and an extension of programs for energy-intensive industries to help manufacturers meet higher energy bills. high.”
The survey of 287 companies was conducted between May 16 and June 6.