Britain’s manufacturing sector is set for two successive years of contraction as deteriorating economic conditions at home and abroad take their toll.
Figures from industry body Make UK predict that the sector will shrink by 3.2 per cent next year.
It is on course to have declined by 4.4 per cent this year after a pandemic bounce-back in 2021.
Decline: Figures from industry body Make UK predict that the manufacturing sector will shrink by 3.2 per cent next year
Make UK chief executive Stephen Phipson said: ‘There is no sugar-coating the outlook for next year and possibly beyond.
‘Even for a sector as resilient as manufacturing these are remarkably challenging times.’
A Make UK report pointed to the impact of global supply chain disruption and wage pressures for manufacturing workers.
It said that the level of vacancies – running at 86,000 – was costing the industry almost £20m a day in potential output.
‘The sector has had a very difficult year,’ the report said. ‘It looks like 2023 will be equally as challenging.’
The report suggested manufacturing output grew in the last quarter but will shrink at the start of 2023, while a measure of investment plans was negative.
Make UK is calling for migration rules to be eased and tax incentives for training schemes to be expanded.
Phipson said: ‘Government needs to work with industry to deliver a long-term strategy with growth at its heart.’
The report underlines the gloomy outlook facing the UK economy as official figures look set to show a small bounceback in GDP for October.
