Loans offered to ailing British car manufacturers will boost temporary staff demand, according to recruiters.

The European Investment Bank has agreed to make loans to Jaguar Land Rover and Nissan as part of its EU-wide bailout package.

Greg Latham, managing director of manufacturing, engineering and logistics recruiter Encore, told Recruiter it would have a direct effect on temporary demand.

“For suppliers of contingent labour it’s huge. The second-tier suppliers have reduced their staffing to the core. At the slightest sniff of an order going they are going to increase the number of temporary workers. The orders have been held back by the likes of Jaguar Land Rover until they had these loans confirmed.”

Jaguar Land Rover will receive around £340m to develop efficiency technologies and £373m will be split between Nissan’s Sunderland plant and its factory in Spain.

Tim Cowell, managing director of manufacturing recruiter MRL, told Recruiter, the loans are essential.

“We may lose the talent in the sector if these companies aren’t helped and the impact on the supply chain of these companies failing would be huge.”

The latest figures from the Society of Motor Manufacturers shows new car sales fell 30.5% in March compared to the previous year.