UK manufacturing begins recovery as demand jumps in May

The latest manufacturing figures for May show a marked improvement on the previous month as production got back into gear and nearly half of orders were made up from March and April. Following the lockdown, manufacturers faced production shutdowns and had to furlough staff in many sectors. Among the hardest hit were auto manufacturers as demand for oil plummeted and car use fell to its lowest level since 1955.

But following May’s figures, the sector is now in a phased recovery and is set to make further gains in June as it seeks to close orders delayed by the lockdown. For supply chains, the lockdown put enormous strain on just-in-time (JIT) production as UK manufacturers were not able to get crucial parts from other countries including China. With factories closed around the world, supply chains have been turned upside down, and the effects of prolonged disruption has meant that many manufacturers have had to delay or cancel their planned activities. And with delays come increasing costs and smaller suppliers are also unable to make ends meet as their orders dry up – creating a viscous downward cycle.

However, with the UK’s lockdown easing further towards the end of June, there is room for  cautious optimism with increased activity as businesses consolidate their operations and move forward – albeit at a slow pace for now.