5 November 2001
Machinery sector ‘to lose 4000 jobs’
By Olivia Cooper
THE farm machinery industry is set to lose over 4000 jobs next year, financial analyst Plimsoll Publishing forecasts.
But the current uncertain climate is not to blame, says the report.
“For the last three years the cost of employing people has been increasing at a greater rate than the industry has been able to afford.”
The cost of salaries increased by 9% in three years, show audited accounts from the 1000 biggest companies. But sales fell by 9% in the same period.
One-third of the companies are already making losses, and a staggering 50% will not be able to absorb next years anticipated 4% salary increase.
This provides “strong evidence” that at least 84% of the industry will need to shed jobs in the next 12 months, according to Plimsoll.
Interestingly, it is the larger companies that face the biggest problems.
“Smaller companies can make moderate, more frequent decisions to keep better control over efficiency,” said senior analyst David Pattison.
“But larger companies tend to make big decisions infrequently, and often leave them too late.
“Managers will use the current economic and market conditions to make decisions frankly they should have made 18 months ago,” he predicted.
However, it is not all bad news. Some companies are doing “incredibly well”, and 10-15% of those surveyed were pegged as “trailblazers”.
“These are the companies that have cracked it, and they will go on to build the future of the industry,” said Mr Pattison.