Britain’s manufacturers saw orders plunge at their fastest pace for almost 40 years over the last quarter as the Covid-19 crisis continued to hit the country’s makers.
Many factories were forced to temporarily shut while key industries such as aviation and car manufacturers have been hit as customer demand has ground to a halt.
Output volumes in the three months to July fell at a similar pace to the quarter to June, according to the latest CBI quarterly Industrial Trends Survey.
The survey of 356 manufacturing firms showed volumes declined by 59% as orders plummeted by 60%. Both domestic and export orders declined at record paces.
But manufacturing firms also said they expect output to begin to recover in the coming months.
CBI chief economist Rain Newton-Smith said: "Manufacturers continue to face extreme hardship due to the Covid-19 crisis.
"There are tentative signs of gradual recovery on the horizon, with firms expecting output and orders to begin to pick up in the next three months. But demand still remains deeply depressed."
Britain’s car manufacturing industry has been a surprise bright spot in the economy over the last decade, but Japanese giant Nissan cut 250 jobs at its Sunderland plant last month. Meanwhile suppliers to the aviation industry such as Rolls Royce have been forced to slash thousands of jobs as global travel ground to a halt amid the pandemic.
Business sentiment stabilised in the three months to July, following a survey-record plunge in April, while export sentiment fell at a slower pace following a record decline in the last quarter.
Tom Crotty, group director at Jim Ratcliffe’s petrochemicals giant Ineos and chair of the CBI Manufacturing Council, said: "Government policy measures have proved vital in supporting manufacturers during the crisis, but it's clear that many firms are still in distress.
"As the UK economy begins to recover it will remain vital that the Government continues to work with firms to both shore up near-term cash flow and build a stronger, more sustainable manufacturing sector."
Firms said they expect employment to decline at a slower pace next quarter.
