Banking covenants across the hard hit engineering and industrials sectors are unlikely to be breached, according to analysis by investment bank Berenberg, even for the most levered businesses.

‘We believe these companies are very well placed,’ it says, referring to the likes of FTSE 100 firm Halma (HLMA), plus FTSE 250 members Electrocomponents (ECM), Spectris (SXS) and Vesuvius (VSVS).

Berenberg believes that supportive government initiatives and more flexibility shown by lenders will help companies navigate the current economic slump.

‘Many of the companies in the UK industrial sector are market leaders and critical to global supply chains,’ says Berenberg. While this does not mean companies are too big, or too important, to fail it believe customers and suppliers are likely to work hard to support one another in these times.

Its analysis suggests most UK industrial companies have relatively low levels of debt. Only industrial furnace equipment manufacturer RHI Magnesita (RHIM) is expected to have borrowings more than twice earnings before interest, tax, depreciation and amortisation by the end of 2020.

Even then, there remains scope to cuts costs, delay discretionary investment, reduce stock levels and extend payment terms.

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