Get set for "very difficult year" says BDO

Huge pressures on sovereign and bank dept are set to scupper pro lending rhetoric from Westminster and the banks, BDO predicted. British manufacturers will also suffer dwindling demand from their largest international customers, the BDO warned. Rising export demand from developing nations could offer some respite, the BDO added. But a clear and concerted government strategy for manufacturing was fundamental for the sector's sustained success. Tom Lawton, BDO head of manufacturing said: "The task of rebuilding the manufacturing sector will not be easy and we must accept that it may take years. However, a renewed focus on manufacturing is vital for growth. Lawton added:"In 2012 we expect that the government will continue to focus attention on the rebuilding of manufacturing. But in order to emphasise the importance of this sector to economic recovery and to enable long term sustained growth the government must develop a clearer and more explicit medium to long-term framework and strategy for the sector." An expected worldwide recession in 2012 meant manufacturers had to keep a watchful eye on cashflow and working capital, the BDO stressed. Global pressures could result in many UK companies shedding labour to stay afloat this year, the BDO said. Brighter news could come from growing export links with unexplored markets such as Columbia, Vietnam, Indonesia and South Africa, the BDO ruled.