Good morning and welcome to this week’s Friday Brief.
You may have noticed more newsletters from the MTA, often containing the latest government information on Covid-19, hitting your inbox over recent weeks. We have a dedicated page on the MTA website with all this advice collected together and with easily downloadable PDF’s, please head over to https://www.mta.org.uk/coronavirus-advice for more information.
Last night saw the latest of a round of what, only a few weeks ago would have be considered extraordinary measures to support business. The Chancellor announced a tailored loan scheme for companies that were falling between the existing schemes for SMES and Large Corporates, Coronavirus Large Business Interruption Loan Scheme (CLBILS). Companies in what has been called this ‘stranded middle’, with turnovers between £45m and £500m, will be able to access Government backed loans. You can find out the details, which are still a little sketchy, here, but in the first instance companies are advised to talk to their banks.
There were changes to SME CBILS announced too. As expected, personal guarantees are being taken out of the schemes for loans of less than £250,000 and capped at 20% of value over that limit. The requirement that the lender must exhaust commercial options before offering a CBIL has been removed. This has been a key ask from business organisations including the MTA. Loans will still be available at the lender’s discretion but last night the Chancellor said that he wanted them to reach ‘as many businesses in need as possible’. We will be watching closely to see how that develops and would welcome feedback from members - please email the MTA’s Head of External Affairs, Paul O’Donnell, at email@example.com . He would also like to hear from Associate Members of the MTA about the financial, and other, services that they are offering to engineering companies during the crisis so that they can be made visible across our network.
There have some changes this week to customs requirements, to ease them at this difficult time. Please follow this link to Find out about Moving goods through customs during the coronavirus (COVID-19) and this one to Find out about temporary changes to customs policy and authorisations to assist businesses during the coronavirus (COVID-19) outbreak.
Many MTA members have rallied to the call to help produce the ventilators that are so desperately needed by the NHS, in particular assisting the Ventilator Challenge UK consortium. But there are other areas of medical technology which are short supply too. The Government has set up a portal which aims at meeting those needs. They need not just engineering and manufacturing capability but capabilities like logistics and warehousing to. Click here to register your company. We also have an urgent request for anyone who can urgently source Rotary Pots potentiometer in the story below.
The MACH team would like to ask our exhibitors who have already signed up to attend the show in 2021 to send us your news stories to share. We have seen a lot of positivity come out of the UK manufacturing sector, with companies helping in the efforts to produce ventilators, offering the use of equipment for free and generally supporting the national effort. So if you have a good news story you would like featured on the MACH website or in our newsletter please email firstname.lastname@example.org for more details.
The new edition of our Business Survey includes a couple of questions about the impact of Covid-19 on your business. We are being asked about the impact on the industry on a regular basis and this is the only way we really have of making substantiated statements, so please consider taking part this month, even if you do not usually participate; The on-line form is available at www.mta.org.uk/mta-business-survey-mar20 but if you only want to respond the questions about Covid-19, you can download the survey form as a pdf from the article below.
CECIMO have published recommendation to policymakers on unleashing the potential of Additive Manufacturing to fight COVID-19 . The current COVID-19 outbreak is causing severe shortages of essential medical equipment, particularly in those countries with the most significant number of patients. Find out more within the Brief.
The MTA are big supporters of the National Sales Conference and have been given a special offer for Members. The team are planning a series of webinars on different subjects, all business/sales/marketing related, notably in Crisis Management Mode and Preparing for Change. MTA Members can gain access to these free professional development webinars, which are now live for registrations, by visiting www.NSConference.co.uk/webinars.
The MTA has been asked to circulate a new tender opportunity with Solihull College and University Centre in the West Midlands for the provision of eight specialist engineering machines to include but not be limited to Traditional Industry standard machines and CNC machines including EDM machines and associated tooling to support teaching and learning outcomes in Engineering. Find out more in the story below.
The manufacturing PMI data for March was almost universally negative in being both below the crucial 50 level which indicates contraction and lower than in February. There were some exceptions to this, perhaps most notably China which saw the reading return to a neutral level following the sharp drop in February. We unpack the numbers in the article below.
You will recall that last week we reported on an update of the macro-economic forecast from Oxford Economics and this has now been developed through to reflect the impact on manufacturing. Inevitably the short-term outlook is poor but over the 2nd half of the year a reasonably robust recovery is anticipated although the impact does vary by industry with those most closely related to consumers seeing the largest impact. You can get the slide-set from this updated forecast from the MTA website to view alongside the summary of the forecasts in the article this week.
This week has also seen a batch of new economic data, although inevitably, this reflects more about the past than the current crisis in most cases. With the release of the national accounts data this week, there was no change to the estimates of GDP either in the 4th quarter of 2019 (flat) or for the year as a whole (+1.4%) but this release does bring a breakdown of the investment data; while this was flat for total business investment, the manufacturing sector saw a fall of -3% compared to 2018 while the engineering & vehicles industry group (which is just under half of the total for manufacturing) saw a reduction of -4½%. Our note on the CBI Industrial Trends Survey slipped through the net last week so we have included it here; a reminder that although the results were not too bad, the trends for output are based on a rolling 3-month period so will take another month to start to show the severity of the hit to activity. The European Commission’s sentiment indicator is more short-term as it takes inputs month-by-month and this shows a large reduction in industrial confidence, although like the PMI readings, this is also affected by a false positive reading from one element of the calculation (stocks of finished products). The Bank of England’s agents report which normally looks across a whole quarter has focused more on the feedback received during March and there is more detail in the report below. Finally, this week, the latest dataset for the contract price adjustment service that MTA subscribes to on behalf of members is available.
That’s all for this week, we’ll be back next Friday with more industry news and views until then stay safe and have a great weekend from everyone at the MTA.