Senior Economist, Make UK
Business confidence among Britain’s manufacturers has dipped at the sharpest rate since the onset of the pandemic in response to rising costs, according to Make UK and BDO’s Manufacturing Outlook Q4 2024 report.
The report says that the mood among companies has deteriorated considerably since the last survey in Q3, when almost 60% of companies saw a brighter economic outlook under a new Government.
Make UK says 70% of manufacturers reported that they have seen their costs already increase by up to 20% in the last year, while almost one in ten had seen their costs increase by up to 50%.
The survey shows 86% of companies will see their business costs increase due to the Make Work Pay reforms, with almost half of companies (44%) saying the increase will be ‘significant’.
Output and order levels have remained positive, with recruitment and investment intentions reported to be stable. However, with substantial extra business costs set to be added to those that companies were already facing, particularly the changes to National Insurance Contributions, Make UK has revised its sector growth forecasts, with a -0.2% contraction in 2024 and growth of just 0.7% in 2025.
Make UK Senior Economist Fhaheen Khan said:“Having faced a cost creep for most of the year, manufacturers are now facing a cost crisis which has brought a sharp dip in their confidence. While overall conditions had begun to gradually improve during the year, the Budget has brought this to a shuddering halt, with the substantial increase in National Insurance Contributions potentially the straw that might break the camel’s back for some.
“There is now an urgent need for Government to look at other measures which might mitigate the impact of the rocketing costs that businesses are now facing.”
