Newspaper article The Journal (Newcastle, England)

Gloomy Outlook as Recession Bites Hard

Newspaper article The Journal (Newcastle, England)

Gloomy Outlook as Recession Bites Hard

Article excerpt

Byline: Peter McCusker

HUNDREDS of North East manufacturers have recorded their gloomiest ever predictions as many revert to short-time working and staff redundancies in the wake of the deepest recession for years.

The quarterly survey from the manufacturers body EEF demonstrates how the grim global economic picture has shaken confidence to the core amongst the region's producers.

Some 40% more of nearly 800 North East firms surveyed said the prospects of winning new orders had deteriorated in the last three months, and there was little sign of improvement.

Tony Sarginson, regional manager of EEF, said: "There is simply no hiding the fact these figures make 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 that situation improving right now."

Nationally, output and order levels hit record lows with 140,000 job losses expected in 2009.

The North East picture reflected the overall gloom with only electronics holding up.

The motor vehicles sector reported the sharpest fall in both output and orders as balances hit -91% and -89% respectively.

Elring Klinger (GB), which manufactures engine components for European car makers, has reduced its workforce from 130 to 87.

The business, which has been based in Redcar for 45 years, is on a four-day week with production facilities operating three days a week.

Managing director Ian Malcolm said: "Our order books are well down, our staff numbers have been reduced, we are on short-time working and the staff are banking hours.

"We had budgeted to turnover pounds 1m a month but in February we turned over pounds 400,000. What we once did in a week we now do in a month.

"What the Government is doing is not enough. What's the point in giving employers money to take staff on when the reverse is happening and we are having to lay off staff? …

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