UK braces for 2 yrs of recession as manufacturing sector shrinks by over 4%

The UK’s manufacturing sector shrank by more than 4% this year, a survey found, with predictions of another sharp decline in 2023.
 

Deteriorating economic conditions both in the UK and abroad are imposing a “vice-like grip” on factories, industry body Make UK said Monday. Its outlook, based on a survey conducted with accountancy firm BDO LLP, showed a 4.4% contraction this year and 3.2% drop next year.

Make UK warned that this year’s decline is partly the result of tough comparisons, given the economic rebound from Covid in 2021, and a methodological change. Still, the forecasts have been consistently revised downward in recent months.

“There is simply no sugar-coating the outlook for next year and possibly beyond,” said Stephen Phipson, Make UK’s chief executive officer. “These are remarkably challenging times which are testing even the best and most successful of companies to the limit.

The lobby group called on Prime Minister Rishi Sunak’s government to loosen migration rules in a bid to ease labor shortages, extend relief on commercial property taxes to factories and boost tax breaks to encourage investment.