Man­u­fac­tur­ers scale back in­vest­ment in wake of Covid blow

The Daily Telegraph - Business - - Business - By Alan Tovey

MAN­U­FAC­TUR­ERS are slash­ing in­vest­ment as they fight to sur­vive the im­pact of coro­n­avirus and grow­ing Brexit wor­ries, echo­ing the col­lapse seen in the wake of the great fi­nan­cial cri­sis.

In­dus­trial com­pa­nies’ spend­ing plans dropped to a bal­ance of mi­nus 32pc in the third quar­ter, down from mi­nus 26pc in the pre­vi­ous pe­riod, re­search from trade group MakeUK and BDO re­vealed. Il­lus­trat­ing how in­vest­ment is plung­ing, pre-Covid in­vest­ment in­ten­tions in the sec­tor, which makes up a 10th of the econ­omy, were run­ning at plus 20pc in the first quar­ter of 2020.

Cut­backs are now clos­ing in on those seen in 2008 and 2009, sig­nalling that man­u­fac­tur­ers are “bat­tling for their lives”, even though out­put for the quar­ter rose to mi­nus 36pc from the his­toric low of mi­nus 56pc in the pre­ced­ing three months.

Tom Law­ton, head of man­u­fac­tur­ing at BDO, said: “While the in­dus­try has man­aged to claw back some lost ground from a dis­mal sec­ond quar­ter, the con­tin­ued col­lapse in in­vest­ment in­ten­tions is a real cause for con­cern.”

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