EEF manufacturing job-loss prediction increased to 188,000

Manufacturing job losses this year could be more than a third higher than previously expected, with up to 188,000 jobs lost, the industry’s employer body has warned.

Only three months after predicting the sector would see 140,000 redundancies this year, the EEF has increased its prediction by 48,000, citing the continuing sharp drop in output.

The EEF was also forced to lower its estimate for manufacturing output in the UK, which it now expects to fall by 11% this year, against its previously projected fall of 8.6%.

However it has also predicted that the pace of decline will ease over the next three months and growth could return by the end of the year.

Lee Hopley, EEF head of economic policy, said: “The weakness in world markets has hit the sector hard, but it looks like manufacturers are now close to the bottom of the cycle.

“Nevertheless companies will be navigating through the current economic storm in the months to come. And there are big question marks about when we will see any substantive signs of a recovery in demand.”

Up to 5,000 Vauxhall employees are still waiting to hear whether their jobs are safe, as business secretary Peter Mandelson with executives of Magna International, the company set to take over the European arm of General Motors.

Meanwhile 3,400 workers at the Honda factory in Swindon returned to work today after a four-month shut down. The workers returned to the factory accepting a 3% pay cut for 10 months, while managers took at 5% pay cut.