Thousands of IT jobs in the manufacturing sector are at
risk despite the sector outperforming the rest of the economy, a
manufacturers' association says.
Leading manufacturers
Nissan, Cummings and
JCB announced job cuts totalling 2,700 in the past fortnight,
and these will have a knock-on effect among their suppliers.
The Engineering Employers
Federation (EEF), which represents 6,000 manufacturing
companies, estimates 90,000 manufacturing jobs are at risk this
year. The IT department will share the pain as firms slash budgets
and kill projects, an EEF spokesman said.
"Much of the capital equipment these days is software-driven,
and the supply chain these days depends on IT, so a lot of IT jobs
are at risk," he said.
He added some innovative companies might escape relatively
unscathed, but innovation was a two-edged sword. "If you depend on
innovation you need to keep up spending on IT, so if you cut IT
spending, you risk losing your competitive position," he said.
EEF chief economist, Steve Radley, said, "The main priority for
manufacturers right now is to keep the skilled workforce that they
already have and maintain cash flow."
Radley said the manufacturing sector was likely to shrink 5%
this year, led by the automotive sector which was expected to
shrink by 10%. There are few prospects of a turnaround within two
years, he said.
He believed
government
proposals to help people back into work were missing the mark.
He asked the government to consider a six-point plan to help the
sector. He suggested the government should:
- Introduce a comprehensive and national, not regional, scheme to
guarantee bank lending to businesses of all sizes
- Minimise the effects on supply chains if credit insurance is
withdrawn or reduced
- Increase the money supply and trade credit without increasing
the risk to the Bank of England's balance sheet, which would lead
to greater volatility and undermine growth in the long run
- Permit more flexible and generous short-time working allowances
and renew its focus on adult apprenticeships
- Restore empty property relief and freeze business rates for 12
months
- Limit new regulation