250 jobs could be lost at listed manufacturer
Doncaster-based manufacturer Polypipe says it may have to axe 8% of its workforce.
The business says medium-term economic and industry forecasts show a significant impact from the COVID-19 outbreak on both the wider UK economy and specifically the UK construction industry.
It warns latest forecasts from the Construction Products Association show residential new build demand in 2021 is likely to be 20% lower than 2019 levels, and commercial demand 18% lower than 2019 levels, even with recovery in the second half of 2021.
In an update this morning the company, which makes plastic piping and ventilation systems, explains: “In light of this medium-term outlook, we are taking regrettable but necessary steps to adjust our manning levels and cost base to reflect this level of demand.
“Unfortunately, it means that we are entering a consultation period with our employees to review these steps, which if actioned in full, will lead to the loss of approximately 250 jobs or 8% of the workforce.
“It is important to note that there is no planned permanent closure of any facility, which leaves the Group well placed to react to any sustained but unexpected increase in customer demand.”
Polypipe adds that it has seen an improving trend since its update on 7 May, with June 2020 revenue some 30% below 2019 levels compared to 66% below in April 2020.
Overall, Group revenue for the six months to June 2020 was approximately 24% lower than the six months to June 2019.
The company’s update notes: “We are encouraged by the Group’s performance in May and June compared to April and also by reports of better than expected activity in the housing market after its reopening on 13 May 2020, as well as Government-announced increased levels of investment in infrastructure projects.
“However, at this stage we remain cautious as to whether this performance will be sustained into the autumn and winter.
“We are currently manufacturing at all main sites at varying levels of capacity utilisation, and currently have 25% of our workforce furloughed, compared to 61% at the height of the crisis.”