Yahoo Finance Coronavirus: UK factories slash jobs in 'worst month in recent history'
UK factories have slashed production and jobs at the fastest rate in decades as the coronavirus crisis has battered global supply chains and overseas demand, new figures suggest.
A closely watched survey on Friday showed firms reporting the biggest month-on-month slump in manufacturing output, employment, new orders and new export trade in the 28-year history of the poll.
The headline figure on the manufacturing purchasing managers’ index (PMI) for April, by IHS Markit and the Chartered Institute of Procurement & Supply (CIPS), slid to 32.6, lower than analysts’ already bleak predictions.
The figures show the net balance of firms reporting growth or decline, with numbers below 50 showing most firms’ activity shrinking and and above 50 showing a majority with growth.
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“Last month’s dismal predictions became a reality in April as the manufacturing sector took an abrupt nosedive into the red,” said Duncan Brock, group director at the CIPS.
Rob Dobson, a director at IHS Markit, added: “UK manufacturing suffered its worst month in recent history in April.
“Huge swathes of industry were hit hard by company closures, weak global demand, lockdowns and social distancing measures in response to COVID-19.”
Firms highlighted weak demand both at home and abroad amid global lockdowns, as well as the impact of labour shortages amid job losses and use of the government’s furlough scheme.
Safety concerns over the virus have also seen some manufacturers halt or re-structure production. Jaguar Land Rover has said some of its workforce will return to work with “robust” new safety measures and social distancing rules this month.
They also report waiting longer for supplies than at any time since the survey began as supply chains have suffered from the pandemic. Logistical issues, border issues and delays to shipping and air freight were flagged, and some firms’ suppliers had limited capacity or gone out of business.
But average input costs rose only slightly, with some high prices from shortages partly offset by lower oil costs and supplier discounting amid weak demand. The few firms reporting increased production were in medical- and food-related goods.
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