More than half of the companies surveyed are anticipating having to lay off up to a third of their current workforce. Three out of every five are predicting redundancies at some level.
The Manufacturing NI survey shows that whilst most manufacturers have staff back in place 13% of companies are still to begin any form of production and of those back producing, 1 in 3 have less than half their employees back in work.
Only one quarter of firms have almost a full complement of workers back.
The Job Retention Scheme has been widely used to avoid redundancy for now with 20% of firms reporting they had their entire workforce on furlough at some point. Almost 2 out of 3 had more than three quarters of their staff on furlough demonstrating production had largely stopped across the sector.
The biggest reasons for furlough was a lack of work, wanting to keep their skills base intact to hopefully return to meet customer demand and to implement social distancing within the workplace.
The amendment to the Job Retention Scheme announced by the Chancellor on Friday will initially help avoid redundancies with just less than half, 49%, believing that the new ‘Flexi-Furlough’ from 1 July will alter their need to make redundancies. However, only 18% say that redundancies can be saved when the Chancellor brings in greater employer contributions (NIC and Pensions, then 10% then 20%) from August onwards.
Only 6% of firms have seen an increase in turnover this quarter with 46% seeing turnover decrease by more than 50%. Two thirds of firms have seen a significant decrease in turnover.
One quarter of firms have received a grant or some financial support from Government, 73% have not had any cash support. Of the survey responses, just 8% say they have received a £10k grant. This will be the micro manufacturing businesses.
The rest have relied on borrowing from Directors, cash within their business, one in four have had a CIBLS and 18% relied on the VAT Deferral scheme.
There was a strong call for better financial support for SME manufacturers, the critical firms we hope to grow and who make up the supply chain to larger exporting manufacturers and other sectors; for more investment and flexibility for apprenticeships and for the Executive to do more to get people including public sector workers, back to business and back to work.
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