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Engineering downturn

Manufacturers suffer ‘economic tornado’

Paul Sheerin

Paul Sheerin: ‘action needed’ (pic: Terry Murden)

Scotland’s manufacturers expect to cut jobs and investment after suffering a severe slump in orders and output in what an industry leader described as an “economic tornado”.

Trade body Scottish Engineering said the data for the second quarter underlined “the speed of damage” that Covid-19 has brought to the economy, with the manufacturing sector deeply impacted.  

Not one key performance indicator has remained positive, with orders and output falling in at least 60% of companies, and one in four (27%) of those reporting losing workers.

There is a stark fall in confidence with a negative swing of 80% in only three months. 

Almost eight in ten (77%) believe the impact of Covid-19 will still be felt by businesses in 12 months’ time.

Four out of five companies (80%) say their organisation will likely shrink their payroll in the next six months.

More than seven in ten (72%) forecast that they will have to reduce training and apprenticeship plans to ensure business survival.

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Social distancing has reduced operating efficiency by an average of 27%.

Scottish Engineering’s chief executive Paul Sheerin commented: “Covid-19 has been an economic tornado, both in the pace and impact that it is causing, and these results make crystal clear the need for rapid recovery actions as soon as public health considerations allow. 

“Part of that recovery will look and feel different to the way we have worked before, as amongst these massively difficult business conditions, there has been recognition that our adaptation to digitally connected working shows advantages previously unseen.”

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