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Contact Details: Dr Emma Parry T: +44 (0)1234 754808 E-mail

Fears for UK manufacturing confirmed

Thursday, August 02, 2001

For the first time since December 1999, a majority of UK managers and directors in manufacturing expect a fall in employment over the next six months, according to research published today.

The fall comes after anticipated recruitment activity in manufacturing peaked at the end of last year before the slowdown evidenced in successive surveys this year.

The findings are contained in the latest Recruitment Confidence Index (RCI), a quarterly survey of UK directors’ and managers’ expectations of future recruitment activity and business conditions over the next six months. It is published by Cranfield School of Management in partnership with The Daily Telegraph.

Other key findings in the summer 2001 RCI report:
• Recruitment activity is expected to be lower in manufacturing than in the service sector. In addition, staff turnover across both services and manufacturing is expected to decrease further since first dipping in Winter 2000/01 – with more organisations reporting a decrease than an increase for the first time since December 1999.
• Pay increases are expected to be substantially higher in the service sector than in manufacturing. For example, 31% of respondents in services expect annual pay increases of more than four percent compared to only 11% of respondents in manufacturing. Moreover, expected annual pay increases of more than four percent in manufacturing have decreased from 18% in Winter 200/01 to 11% in the present Summer 2001 survey.
• Whilst manufacturers indicated they do expect demand for their products to increase, they believe the increase will be much lower than in previous quarters.

The Recruitment Confidence Index stands at 125 for all staff and 110 for managerial/professional staff, compared to 134 and 125, respectively, in Spring 2001. The RCI predicts changes in recruitment activity in the next six months. Values larger than 100 imply an expected increase in recruitment activity. Values less than 100 imply that recruitment activity will fall. When the index obtains a value close to 100, recruitment activity is expected to remain stable. In the present quarter the RCI figure for manufacturing managerial/professional staff has fallen below 100 for the first time.

Commenting on the findings, Professor Shaun Tyson of Cranfield School of Management said: “This survey captures the mood of managers and directors, reflecting how they are feeling about the future for business at a time when there is much speculation about what impact economic downturn in the US will have on the UK.”

Michelle Turner, Regional Recruitment Sales Manager of The Daily Telegraph comments: Despite the noticeable recent drop in ad volumes, both the RCI and feedback from clients indicate that good engineers are just as difficult to find today as they have been for the past few years.”

Some 500 organisations representing a cross-section of business in the UK took part in the latest RCI Summer 2001 survey. Respondents include finance directors, managing directors, HR directors/managers and recruitment specialists. To obtain a copy of the report contact Caroline Mahoney, Cranfield School of Management, Tel: 01234 751122, e-mail: caroline.mahoney@cranfield.ac.uk

Ends

For further information or a copy of the RCI report contact: Margaret Kubicek, Press & PR Officer, Cranfield School of Management, Cranfield, Bedford MK43 0AL. Tel.: 01234 754348, e-mail: margaret.kubicek@cranfield.ac.uk