Thousands of IT jobs in the manufacturing sector are at risk despite the sector outperforming the rest of the economy, a manufacturers' association says.
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- Minimise the effects on supply chains if credit insurance is withdrawn or reduced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