According to the latest research, the number of manufacturers entering insolvency rose to a five-year high last year.
This is thought to be largely due to Brexit uncertainty and a general economic slowdown across Europe.
Manufacturing orders have been falling for months, leading to a 7 per cent increase in the number of firms closing down or deferring decisions on spending for growth.
October saw the sixth consecutive month of falling new orders, mainly caused by lack of demand from domestic customers, forcing firms to lay off workers for the seventh consecutive month.
As one of the report’s authors commented, manufacturers should be investing in order to close the productivity gap with their peers but instead are having to conserve cash to keep them going until order books recover.
Meanwhile, a spokesman for Make UK, the manufacturers’ lobby group, said that many manufacturers have some form of shutdown planned, while others are engaged in expensive stock building activities.
The automotive industry has been similarly hit, with car production in the UK falling by 3.8 per cent in September, adding to a generally turbulent year, according to the Society of Motor Manufacturers and Traders (SMMT).
However, there was some respite from the gloomy news in November, with the Confederation of British Industry’s (CBI) latest industrial trends survey suggesting that orders picked up more than expected from the low seen in October, although stayed well below their historical average.
The survey also confirmed, however, that the manufacturing sector officially contracted in the second quarter of this year and flat-lined in the third, putting it close to recession.
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