The Bank of England has hiked rates to one per cent, taking them to the highest level in 13 years and adding more pressure to Lancashire manufacturing at a time when business sentiment and export optimism are at their lowest levels since April 2020.
That is according to the latest CBI Industrial Trends Survey, the first since Russia invaded Ukraine, which reported that the balance between UK factories who were more upbeat about their business situation, rather than pessimistic, slumped to -34 per cent in April from -9 per cent in January.
It also found that investment intentions for the year ahead were much weaker in April compared to three months ago, signalling that firms are starting to think about conserving cash.
Survey respondents also reported that growth in output and new orders slowed over the last quarter, with new orders expected to keep falling in the next quarter.
Average costs have grown at their fastest rate since the mid-1970s, driven by rising raw material, energy, transport and employment costs, which is adding to the sector’s woes.
Babs Murphy, chief executive of the North and Western Lancashire Chamber of Commerce, organisers of the BIBAs, said: “Manufacturers are among the first to start feeling the pinch when the economy slows. Right now, they’re seeing lower orders, supply chain issues and higher costs, all of which are putting a real squeeze on them.
“The recent Bank of England interest rate rise will only add to those pressures. Businesses that occupy mortgaged premises, or that have funded new machines with loans, will see their repayments increase at the same time that they can expect less demand for what they make as consumers and other businesses start to cut back their spending.
“Fortunately, manufacturers in the county have traditionally demonstrated great ingenuity and resilience in tough times and will hopefully be able to weather the current storms.
"It’s something we look forward to recognising and celebrating in this year’s BIBAs.”
Babs pointed out that manufacturers contribute around 18 per cent of Lancashire’s Gross Value Added (GVA), which is significantly higher than the UK average of 10 per cent.
She said that showed just how important it is to the Lancashire economy where it employs more than 87,000 people (13.6 per cent of all local jobs).
It is because of this importance to the Lancashire business scene that manufacturing has its own awards category in the BIBAs.
Previous winners include waste compactor and baler manufacturer, Pakawaste of Preston, and last year, Standfast and Barracks.
Maria Tangi from the Lancaster-based fabric and textile printing business, said: “We think it is wonderful that the whole company gets recognised for its hard work and achievements.”