Alongside 12 other manufacturing organisations, the BPIF has written to the chancellor with a stark warning about the future of the UK's manufacturing sector, which it claims is set to contract by 10% this year.
BPIF corporate affairs director Andrew Brown said that long-term economic growth could only be sustained with a "mixed and balanced economy" in which manufacturing plays a greater role.
He said: "The contribution of manufacturing to the UK economy in the medium term will depend on its ability to navigate through the current recession, together with the targeted support necessary to avoid a retrenchment in investment and loss of skills."
To achieve this, the letter calls for a focus on minimising costs for businesses and easing short-term cash flow pressures, which it describes as "one of the most problematic issues facing UK manufacturers".
A temporary subsidy for employees working on short-time working schemes is among the measures called for by the 12 business bodies, following on from previous demands for a subsidy to avoid redundancies.
In addition, the group has asked the chancellor to hold business rates until April 2011 and to restore empty property rates relief, implementing a temporary increase in the Annual Investment Allowance to £250,000.
The BPIF's letter also highlights the problems posed by the withdrawal of credit insurance and says that "the need to bring forward measures to underwrite trade credit insurance is becoming increasingly urgent", although it does not specify which measures.
Finally, the group stresses that "no additional regulatory requirements are introduced that might impact on the flexibility of their operations" and to avoid "imposing significant administrative burdens on businesses".
The call for action to stem the decline on manufacturing comes as Alistair Darling prepares for a budget in which he will simultaneously attempt to stimulate the economy while recouping the massive government borrowings incurred in the bailout of the banking system.
Growth forecasts are expected to be significantly revised downwards and government borrowing figures are anticipated to be well in excess of the £118bn predicted at the start of the year by the chancellor.
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BPIF calls for 'balanced economy' ahead of forthcoming budget
The BPIF has called on the chancellor to "prepare the ground for a more balanced economy" in this month's budget - one of the most highly anticipated in living memory.
