The government is being called on to provide financial support for the manufacturing industry similar to that given to troubled banks.
The Work Foundation, a think tank aiming to "improve the quality of working life and increase the effectiveness of organisations", says that a financial rescue package is required to safeguard jobs and offset the downturn in demand.
Ian Brinkley, associate director at the think tank, told the BBC "it would be a big mistake just to write the sector off," pointing out that manufacturing jobs that leave Britain are unlikely ever to return.
Manufacturing accounts for half of all British exports and, according to the Department for Business Enterprise and Regulatory Reform, is a "key driver of the UK economy".
The government is yet to respond directly to the Work Foundation"s report, but a wholesale bail-out of the manufacturing industry seems unlikely.
