Forklift News - UK jobs under threat

UK faces a rising tide of unemployment. PHOTO: GABRIELLA LEIBOWITZ

A study by leading industry analyst Plimsoll warns that almost 2,500 jobs could go as forklift companies face tough conditions.

Up to 2,496 jobs could be lost as the UK forklift industry consolidates over the next 12 months, according to the 3rd edition 2008 Plimsoll Analysis. The unwelcome news for the forklift industry coincides with the British Chamber of Commerce survey which suggests unemployment could rise by up to 300,000 over the next 12 months as the UK economy experiences a "prolonged and bumpy landing."

The analysis examines each of the UK’s leading 486 companies and assesses each company’s chances of survival and the steps each could take to charter a path through these choppy times.

The analysis found that large numbers of jobs could be lost as companies seek to get costs in line with sales. One of the largest firms alone could see up to 888 jobs lost, according to Plimsoll.

The analysts suggest that as many as three-quarters of the firms studied will need to reduce their head count.

Of the 486 firms individually assessed, 113 companies, rated in danger, need to consolidate immediately. These firms are currently losing money, are heavily in debt and are exposed to their lenders. They need to take drastic action to shrink their business otherwise their survival is in question. Some of these firms could see 30% of the workforce go as they try to stay in the market.

A further 205 companies need to only "tweak" their business. Making small but simple changes to their business will see them maintain their profitability and improve their stability. Building up their strength is vital as they aim to stay competitive.

Meanwhile, 168 companies are currently leading the market with sales per employee figures of well over GBP211,000. These super-productive firms are generating over GBP7,000 worth of profit per employee and, according to analysts, are well-equipped to see out the next 12 months in good shape and are almost certain to prosper from their weaker competitors’ demise.

"The 113 companies we have identified as in danger need to act now if they are to survive," says David Pattison, Plimsoll’s senior analyst. "It is very important they review their entire business cost base and take action now to significantly reduce their outgoings. Whilst job losses are undoubtedly bad news for any company, such decisive action may be called for to guarantee the ultimate survival of the business - even if this means the business is 30 or 50% smaller than it was."

A Plimsoll spokeswoman stresses that the estimate of shedding 2,496 jobs is not a guess. "We have looked at each company in the report individually and assessed where companies need to make efficiency and productivity gains to meet the recommended sales per employee, and how many staff would need to be lost as a result," she explains.

Reacting to the report, James Clark, secretary general of the British Industrial Truck Association (BITA), cites his organisation’s recent study conducted by Oxford Economics. That analysis predicts a 3% downturn in orders in 2008, stability in 2009 from 2008, and a subsequent increase of approximately 3.5% year-on-year in unit terms until 2012.

"It follows that for those companies who can weather it, the storm may not be too prolonged," Clark says.

Clark admits that "market conditions have undeniably toughened considerably in the first six months of 2008". He says BITA is under no illusions that, when new figures are released at the end of this month, members "may not be able to report such buoyant performance" as the organisation’s last reported increase in sales of 3.5%.

"For now, however, it is too early to comment," he says.

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