ONS data reveals industry resilience
New data from the Office of National Statistics has highlighted the resilience of the UK automotive industry, with 92 per cent of businesses in the sector trading again by the second half of June.
However, up to 5,000 businesses face immediate risk due to low or no cash reserves.
Analysis of the ONS data by the Institute of the Motor Industry (IMI) found that eight per cent of businesses reopened in the last two weeks of June, which equates to about 7,500 businesses and 62,000 jobs, with a further four per cent (19,700 jobs) saying they would open in the first two weeks of this month.
Meanwhile, only three per cent of organisations with a workforce of greater than 250 are still temporarily closed compared to 10 per cent of those with a workforce of less than 250. Between them they comprise 219,000 jobs.
However, the IMI also found that while 19 per cent reported an increase in turnover, 60 per cent reported a decrease, with 6.1 per cent saying that they either had no cash reserves or less than a month, potentially putting 5000 businesses at risk. More than a third (35 per cent) of automotive business said that their cash reserves would last more than six months,
Steve Nash, CEO of the IMI said: “It is tremendously encouraging to see how determined our sector has been in getting back on its feet since the 1 June opening of showrooms. Our previous report showed tentative signs of recovery but the latest data suggests that automotive businesses really grasped the nettle in the second half of June. Just eight per cent had not reopened and 62,000 jobs returned to work from furlough. But with only just over a third saying that cash reserves would last for more than six months, it’s clear that balancing cash flow remains a challenge.”
He added: “The latest data certainly should give some cheer. However, the big concern remains about the long-term impact on the skill-set of the sector. We have continued to lobby government to look at ways to ensure that skills and training are supported going forward and hope that [the] chancellor’s statement provides good news, not just for the automotive sector but right across business and industry.”
