Manufacturers scale back investment in wake of Covid blow
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.”