Manufacturers are set to call on the government to extend the job retention scheme for strategic industry sectors by six months © Ian Forsyth/Bloomberg

More than half of UK manufacturers expect to make job cuts over the next six months as large employers across automotive, aerospace and other core industries brace themselves for a sustained downturn in demand during the pandemic.

The UK will lose high value skills in what is being called a “jobs bloodbath” by manufacturing trade group Make UK, whose members reported that their redundancy plans were ramping up as the prospects for a return to normal trading faded.

The warning comes amid gloomy predictions of the worst employment market since the 1980s, with millions of jobs at risk as companies aggressively cut back their operations to survive the downturn caused by the lockdown.

Tens of thousands of workers have lost their jobs already in the past few weeks, despite government support for employers through the furlough scheme, which helps pay the wages of more than 9m people. The scheme will be wound back starting from next month and halted at the end of October.

In order to revive the economy, policymakers are scrambling to reassure companies that it is safe enough to return operations to near normal.

Over the weekend Boris Johnson, the prime minister, contradicted his chief scientific adviser by playing down the idea of another nationwide lockdown.

Downing Street believes the government will be able to tackle any recurrence at local level, while planning further relaxations of the national lockdown — including an imminent dropping of the “work from home” guidance.

But business leaders have also been warned to prepare for the possibility of another big outbreak later in the year, and many bosses privately doubt Mr Johnson’s hopes for a return to normality in time for Christmas.

Patrick Vallance, the UK’s chief scientific adviser, said on Friday that another national lockdown was possible. “Come winter, the challenges will be very much greater and there is a risk that this could also need national measures as well,” he told MPs.

On Monday, Britain’s manufacturers will call on the government to extend the job retention scheme for strategic industry sectors by six months in order to avoid the loss of highly skilled job losses “on a scale not seen since the 1980s”.

Make UK, which represents 20,000 companies of all sizes, said these sectors were of “critical importance to the long-term health of the economy and their protection is an investment in our industrial future”.

In a survey of its 174 of its members conducted up to July 14, the number of companies planning to make redundancies in the next six months rose to 53 per cent, up from 25 per cent just two months ago.

Almost a third of companies plan to cut between 11 per cent and 25 per cent of employees, with almost one in 10 making between a quarter and half the workforce redundant.

The proportion of companies expecting a return to normal trading to take 12 months or longer has risen to 42 per cent, while just 15 per cent of companies are operating at full capacity.

“As well as the distressing personal impact on livelihoods across the UK, Industry cannot afford to lose these high-value skills which will be essential to rebuilding our economy and investing in the industries of the future,” Stephen Phipson, chief executive of Make UK, said.

“At present, the prospect of a V-shaped recovery for industry seems remote.”

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