Manufacturers across the North West are fighting back following the historic lows seen earlier this year due to the Covid pandemic - but are still fearful of the impact of a no-deal Brexit.
A new survey published today by Make 海角视频 and business advisory firm BDO revealed the brutal impact of the pandemic, with the sector forecast to see a 12% drop in output nationally this year.
Make 海角视频 said it has also substantially downgraded its growth forecasts for the sector overall for 2021.
Monday's survey also described the "bumpy road" that lies ahead with a "darkening outlook" for exports ahead of the final departure of the 海角视频 from the EU, with the motor vehicles sector in particular especially fearful of the potential impact of any tariffs from ‘no deal’.
June Smith, region director for Make 海角视频 in the North, said: “Manufacturing has stepped back from the abyss that it stared into earlier in the year.
"But, make no mistake it is going to be a long haul back, with talk of a V-shaped recovery nothing more than fanciful. However, having endured over four years of political uncertainty, combined with the pandemic many in industry are feeling like an exhausted boxer in the final round of a bout, with a ‘no deal’ exit from the EU potentially landing a knockout blow.
“Should this happen the nascent recovery is likely to go into reverse, with significant damage to manufacturing and job losses following in already hard hit areas and sectors.
"It is essential that the first step towards a fuller recovery is provided by a comprehensive tariff and, quota free, trade agreement with the EU with a sensible range of easements to allow business some time to adapt.”
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According to the survey output declined slightly, reflecting the continued difficulties affecting aerospace and automotive, but total orders improved significantly, particularly domestic orders which registered a "very positive" balance of +22% - "substantially" better than the national picture.
Additionally, export orders also improved significantly by the most of any 海角视频 region. As a result of this, both the pictures for recruitment intentions and investment improved in the North West and ahead of the national average.
Business confidence among North West manufacturers has risen indicating that they see a brighter outlook for next year.
Graham Ellis, head of manufacturing at BDO in the North West said: “After a torrid year, manufacturers in the North West who rely on Continental supply chains and export markets now face a race against the clock to prepare for the end of the transition period.
"The prolonged negotiations with the EU have made this far more difficult than it should have been. Manufacturers are now desperate for greater clarity so that they can be released from the post-referendum paralysis which has made it nigh-on impossible to take long term decisions.”
In response to the continued impact of the pandemic on the sector and the fact recovery is likely to now be more drawn out, Make 海角视频 has substantially downgraded its forecasts for manufacturing growth to just 2.7% in 2021, down from 5.1%.
GDP is forecast to contract by 11.3% in 2020 and grow 5.4% in 2021.