The number of UK manufacturing failures is predicted to increase by 37 per cent by the end of 2008 in comparison to 2007, according to research from accountants and business advisors, BDO Stoy Hayward LLP.
The firm’s Manufacturing Industry Watch report forecasts that as economic conditions worsen, the number of manufacturing failures will rise to 1,841 by the end of this year - a considerable increase from the 1,341 failures seen during 2007.
BDO Stoy Hayward Head of Manufacturing Tom Lawtonat said: "These figures show the end result of the recent dramatic declines in manufacturing activity and show that many manufacturing companies are entering a period of severe pressure.
"The key to survival in these tough economic conditions will be optimising cash reserves through all possible means, including costs saving exercises and working capital management, particularly inventory reduction."
However, worse looks set to come, with the report predicting that 2,413 manufacturers will fail in 2009 - a 31 per cent rise on the 2008’s predicted figure. Insolvencies in the manufacturing industry are likely to stay at this high level throughout 2010 as 2,349 businesses are forecast to fail.