Deteriorating economic conditions in the UK and abroad are putting a ‘vice-like grip’ on factories, according to industry body Make UK
The UK manufacturing sector shrank by more than 4 per cent this year, with another sharp decline expected in 2023, according to a survey.
Deteriorating economic conditions in the UK and abroad are putting a ‘vice-like grip’ on factories, according to industry body Make UK. Based on a survey conducted with accountancy firm BDO LLP, its outlook is for a 4.4 per cent contraction this year and a 3.2 per cent drop next year.
Make UK warned that this year’s decline is due in part to tough comparisons, given Covid-19’s economic rebound in 2021 and a methodological change. Nonetheless, forecasts have consistently been revised downward in recent months.
There is simply no sugarcoating the outlook for next year and possibly beyond, said Make UK CEO Stephen Phipson. These extraordinary times push even the most successful and best-run businesses to their limits, Phipson added.
The lobbying group urged Prime Minister Rishi Sunak’s government to relax migration rules to alleviate labour shortages, exempt factories from commercial property taxes and increase tax breaks to encourage investment.
Recently, the Confederation of British Industry (CBI) said in a bleak economic forecast that three-quarters of companies are struggling to find the required skills and workers. It advocated for changes in government policy, such as a more flexible immigration system and tax breaks to encourage investment.
Britain is in a state of stagflation, with skyrocketing inflation, negative growth, falling productivity and declining business investment, according to CBI director general Tony Danker.
The CBI predicts that the UK economy will contract by 0.4 per cent in 2023, a significant decrease from the 1 per cent growth rate predicted in June. Only in the second quarter of 2024 is the economy expected to recover to pre-Covid levels.
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