Orders falling further
A RAFT of depressing data has shed new light on the economic gloom engulfing the region’s embattled manufacturing sector.
The latest quarterly report by manufacturers’ body EEF revealed plummeting orders, output, employment levels and confidence among North-east firms.
Some 40% of nearly 800 local companies surveyed said the prospect of winning new orders had deteriorated in the last three monthst.
Although EEF said the outlook for the North-east was “slightly better” than the rest of the UK, regional manager Tony Sarginson admitted the figures made “grim reading”.
“The past three months have been extremely difficult for manufacturers, with markets at home and abroad showing severe declines.
“Our companies make good quality products but people are just not buying goods and there is little prospect of the situation improving right now.”
The motor vehicles sector suffered the highest falls in output and orders - with balances of -91 and -89 respectively - as it emerged a Redcar-based engine component maker had reduced its workforce from 130 to 87.
Elring Klinger (GB), part of the global automotive cylinder head and gasket manufacturer, has introduced a temporary four-day week, with production lines running three days per week, to cope with a 60% dip in orders since November.
MD Ian Malcolm, who has no plans to make further redundancies, said: “We have to take these measures in order to survive.
“People will start buying cars again - I just don’t know how long it’s going to take to recover.”
Pessimism is not confined to the motors sector.
Business analyst KPMG’s latest quarterly national business Confidence Survey revealed 81% of bosses thought prospects were “bad” or “very bad”.
Meanwhile, the EEF predicts manufacturing will decline by 8.6% nationally this year - the worst figure since the recession of the early 1980s, and Government action to arrest the decline are inadequate, according to the North East Chamber of Commerce.
It has put together a list of recommendations including the “complete reintroduction” of empty property rate relief and other tax breaks to get the economy back on track.
James Ramsbotham, NECC chief executive, said government initiatives “fall short of what is really needed to give the economy a jump-start.
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