Business failures in the manufacturing sector last year hit levels not seen since the early-90s recession, according to the latest Industry Watch report by accountants and business advisors, BDO LLP. However, the manufacturing sector is expected to outperform the rest of the economy in the medium term.
Around 2,440 manufacturing businesses failed in 2009, an increase of more than a quarter (26 per cent) compared to 2008. But, 2010 will see business failures in the sector fall by 35 per cent which is considerably better than the 14 per cent decline expected for the economy as a whole.
Tom Lawton, head of manufacturing at BDO LLP commented: "Whilst these figures might appear to show that storms clouds are still gathered over the manufacturing sector, there is certainly a silver lining.
"Manufacturers are considerably better placed to bounce back than other sectors that are reliant on consumer spending to fuel their recovery. This coupled with the continued weakness of sterling should see a pick up in international trade and a more positive outlook for manufacturers as the economy rebalances."