Revealed: 34,000 Black Country jobs under threat as steel crisis grips UK

More than 34,000 jobs at 1,700 companies across the Black Country rely on the supply of steel.

And experts point to Black Country engineering group Caparo as just the first manufacturer to be dragged down by the crisis.

Oldbury-based Caparo Industries put 16 of its businesses, employing 1,700 people, into administration on Monday. While buyers are already coming forward for parts of the group, some Caparo companies may face closure with job losses potentially running into the hundreds.

Manufacturing companies are seen as increasingly at risk as the supply of UK steel is hit by the loss of production at the Redcar steel mill and the Tata sites in Scunthorpe and Scotland.

Across the UK's manufacturing heartland of the Midlands there are 12,500 companies, employing 260,000 people, that are in some way, dependent on steel, according to data from the West Midlands Economic Forum.

Paul Forrest, from the Forum, said that in the Black Country around 4,200 people were employed at companies involved in basic metals production. Another 18,300 were involved in fabrication work, 4,500 in machining and manufacturing, 5,500 in vehicle manufacturing and another 1,900 in transport.

"Not every job is at risk," said Mr Forrest. "But they could all be impacted to some extent or another. And those companies involved in basic metals production or fabrication are most under stress.

"Manufacturing companies rely on the supply of high quality steel to make components. If it's not coming from the UK, then they face the cost – and delay – involved in importing it. Anything that pushes up their costs cuts their competitive advantage because they can't react so quickly to customer demand.

"And this comes as Jaguar Land Rover have been hoping to get more of their components supplied locally."

And there are implications for the wider West Midlands economy. Mr Forrest said around 37 per cent of the region's economy was tied in to manufacturing, from component makers through to the transport, IT and professional services firms that support them.

Meanwhile Stephen Cooper, the head of manufacturing at one of the UK's biggest accountancy firms, KPMG, warned: "This is not only a crisis for the metals industry but a crisis that goes to the very heart of the UK's industrial manufacturing. The negative knock on effects of this crisis for the UK economy cannot be underestimated."