Manufacturers in the North East and further afield have called on the Treasury to offer more support amid a poor economic outlook to help “weather the immediate storm”.
Make UK, trade body for manufacturers, and consultancy BDO found that costs are continuing to rise and output opportunities have been stifled.
A survey revealed that two thirds of companies (67.8%) said rising energy costs were causing catastrophic or major disruption. Meanwhile 71.9% said increased raw material costs posed a similar threat and 66.8% have been plagued by rising transport costs.
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Finding talent has also proved challenging for firms, with vacancies at record levels at 4.1 vacancies per 100 jobs.
Despite the Chancellor saying earlier this year that he would offer support to the sector in the autumn, Make UK warned that help is needed before summer in order for businesses to “weather the immediate storm”.
Make UK made several recommendations for the Government including waiving or reducing business rates for the next 12 months and reviewing the effectiveness of business loan schemes implemented during the pandemic.
Dawn Huntrod, director for the North of Make UK, said: “Whilst industry has recovered strongly over the last year we are clearly heading for very stormy waters in the face of eyewatering costs and a difficult international environment.
“Clearly some of the factors impacting companies are global and cannot be contained by the UK Government alone. However, just as it is quite rightly taking measures to protect the least well off, it must take immediate measures to help shield companies from the worst impact of escalating costs and help protect jobs.”
Steve Talbot, head of manufacturing at BDO in the North East added: “Manufacturers across the region have shown their ability to overcome a wave of challenges over the last couple of years to remain competitive.
“Rapidly rising input costs, ballooning energy bills and in some cases inflation-busting pay settlements have hit margins and slowed investment plans. There is now a strong case for Government action to help manufacturers weather the immediate storm and incentivise investment for long-term growth.”
A Government spokesperson said: “We continue to support our manufacturers, including through the tax system with the Annual Investment Allowance and the super-deduction – the biggest business tax cut in modern British history.
“This comes on top of an increase to the Employment Allowance, a cut in fuel duty and an extension to schemes for energy-intensive industries to help manufacturers with higher energy bills.”
The survey of 287 companies was conducted between May 16 and June 6.
