Good morning and welcome to this week’s Friday, well Thursday, Brief.
Yesterday the Secretary of State for Business, Energy and Industrial Strategy, Alok Sharma MP, published a letter to manufacturers which sought to ensure that manufacturers are able to remain open, in so far as possible, during this period. Mr. Sharma said in the letter “Manufacturing is a critical part of our economy and I would like to be clear that there is no restriction on manufacturing continuing under the current rules.” At the same time his Department published further guidelines about staying safe while operating in this period. More details can be found in the story below.
As part of the cross-Government efforts to respond to the impact of COVID-19, the Education and Skills Funding Agency (ESFA) is implementing new measures, for the duration of the pandemic, to make it easier for apprenticeships to continue and complete in a different way if they need to, or to break and resume an apprenticeship later, when that becomes possible.
Innovate UK, as part of UK Research and Innovation, will invest up to £20 million in innovation projects to support UK businesses to focus on emerging or increasing needs of society and industries during and following the Covid-19 pandemic. By fast-tracking innovation, the UK will be better placed to maintain employment levels, a competitive position in global markets and make the UK more resilient to similar disruption. Find out how you can apply in the story below.
The original guidance issued on the Coronavirus Job Retention Scheme was sparse on the question of holidays and we’re still waiting for further clarification. This leaves employers in the difficult position of having to make decisions about their employees’ holidays, and in particular forthcoming Bank Holidays, without knowing how this may affect furlough periods and their right to claim a furlough grant. MTA Associate Member, Citation, has explored the current government’s guidance and outlined some potential options in a new free guide which you can access below.
We are keeping the March Business Survey open over the Easter weekend and hope that you will be able to spare a few moments to let us have your input. The whole survey is available at www.mta.org.uk/mta-business-survey-mar20 but if can only respond to the special questions about the current situation, please go to the story below where you can download the form (the on-line site requires most questions to be answered).
The manufacturing PMI data for March data 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. It is important to remember, however, that the PMI is an indicator of change, so this particular reading says that activity levels fell sharply in February and have stabilised at that low level in March. There is also an issue of false positives from the increase in suppliers delivery times - this is regarded as a positive because it normally indicates increasing activity but in this case it is negative because it shows problems in the supply chain. We explore both of these issues in more detail in the article below.
The other economic news this week is led by the output data for manufacturing to February; although this was before the Covid-19 outbreak took hold on the economy, we were already seeing a double impact on the automotive industry from falling exports to China and a disruption to the supply chain which meant that manufacturing as a whole was weak and the capital goods sub-sector was leading the downturn. There was some good news with aerospace output rising and an increase in activity in the metal products industry. This fed through into the monthly GDP estimate which showed a marginal increase in the 3 months to February, although the month itself was negative (because the weak month of November 2019 dropped out of the calculation). This week we also have data on investment and profitability in the Euro-zone, data on productivity in the UK and the new edition of the CECIMO Toolbox, all for the final quarter of 2019.
That’s all for this week. Due to present circumstances, we’re taking a longer than usual break over the holiday period (although we will be intermittently checking emails), so the Friday Brief will be back in two weeks’ time with more industry news and views, until then, stay safe and we wish you a very happy Easter from everyone at the MTA.