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Majority of manufacturers believe opportunities will
outweigh risks in 2025
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Industrial Strategy to have biggest impact on
manufacturing growth
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But almost nine in ten companies expect their
employment costs to increase
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And warning signals for UK as a place to manufacture
and invest
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New products, markets and digital technologies focus of
new investment
Britain's manufacturers believe the introduction of an Industrial
Strategy and individual sector plans will have the biggest impact
on their growth prospects in 2026, with a majority of companies
believing the opportunities for their business to succeed
outweigh the risks this year according to a major survey
published today.
The findings come from the annual Make UK 2026 Senior Executive
survey, in association with PwC UK, which looks at the
opportunities, risks and challenges for manufacturers in the year
ahead, as well as the outlook for the UK and international
economies.
Access the full report
here
As well as the benefits from an industrial strategy and sector
plans the survey shows that, despite the current challenges from
rapidly escalating costs, a majority of companies believe that
overall, the UK remains a competitive place in which to
manufacture.
However, Make UK warned the survey also signals that the
significant increases in business cost that manufacturers are
facing, especially on employment and energy, are threatening to
reach a tipping point whereby investment plans will be cancelled
or shifted overseas.
In response, Make UK is urging Government to speed up the pace of
delivery on industrial strategy, as well as bringing forward the
much vaunted business energy support scheme and expanding it to
cover the broadest possible range of companies. In addition, Make
UK is calling for greater stability and clarity regarding future
employment legislation and costs given the impact on recruitment
of the increase in NICs and Employment Reform Bill.
Stephen Phipson, Chief Executive of Make UK,
said:
“Manufacturers have demonstrated their resilience over and over
again in recent years and those that remain innovative and are
prepared to invest in new technologies, expanding markets and,
most crucially, their people will continue to thrive.
“But, they can only do this if they are operating in the most
favourable business environment and, despite the commitment to an
industrial strategy, not only is growth anaemic but the warning
lights are now flashing red on the UK as a competitive place to
manufacture and invest. The Government promised significant
change, now is the time to deliver it.”
Cara Haffey, Leader of Industrials and Services at PwC
UK, added:
“The UK's manufacturers are ambitious in their mission to drive
growth. The Industrial Strategy is front and centre of this
optimism but, it will take time to reap the rewards from its
implementation. Nonetheless, the industry can't afford to sit
still. Those shifting their focus to product innovation,
embracing technology and investing in marketing will be the
winners in the battle for growth.”
According to the survey, more than half of companies (57%) say a
long term industrial strategy and sector plans will have the
biggest impact on growth this year, with almost two thirds (63%)
saying they will bring forward investment in response.
The top priorities for investment are new product development for
4 in 5 companies, with more than three quarters (76%) investing
in digital technologies, AI and automation. More than half of
companies (55%) are set to expand their product portfolio and 4
in 10 companies (42%) planning to export to new countries. The
increased use of AI in particular is linked to more than a third
of companies (37%) saying their key area for growth is increased
marketing of their business.
The biggest challenges companies face are significant cost
increases across the board with almost 9 in 10 companies (86%)
expecting increases in employment costs, a similar number (79%)
seeing increases in material/input costs and two thirds (67%)
business rates.
In response, Make UK warned that while some increases are a
result of global factors, domestic employment and, other business
costs, are threatening a tipping point whereby investment plans
will either be cancelled or shifted overseas. As an indication of
sentiment within the sector, almost two thirds of companies (60%)
said they would have decreased or cancelled investment plans if
business tax increases had taken place in the Budget, with a
similar number (57%) they would have shifted investment overseas.
Furthermore, while more than half of companies (57%) believe the
UK to be a competitive place to manufacture, more than a quarter
(26%) view the UK as uncompetitive. In addition, an equal number
of non-UK businesses view the UK as an unattractive location to
invest (39%) compared to those who view it as an attractive
destination (41%).
Ends
Notes to Editors
The survey of 174 senior Executives was carried out between 27
October and 20 November 2025.
