Make UK CEO
Britain’s manufacturers have seen a sharp rebound in activity in the third quarter of the year, with signs that pent up investment demand has been released, while recruitment intentions have also risen sharply.
But in its Q3 Manufacturing Outlook Survey, produced jointly with BDO, Make UK says analysis shows the inability to fill the current 46,000 vacancies in manufacturing is now costing the sector £4 billion in lost output every year.
All indicators in the survey show improvement following a series of weak quarters, with export growth leading to greater demand.The United States has recovered its position as the second most favoured market for growth prospects, having dropped out of the top three global blocs in Q2 for the first time in the history of the survey because of tariff uncertainty.
The survey also shows however that inflationary pressures remain with 70% of companies expecting further increases in costs in the forthcoming UK Budget at a time when cost pressures are already severe. Costs have increased more than expected in the past six months, according to 68% of companies and over half of companies (58%) have, as a result, raised prices this year, while 53% intend to do so in the next six months.
Despite the sharp Q3 rebound in activity Make UK found that growth forecasts remain weak with output forecast to fall by -0.1% this year and -0.6% in 2026.
Make UK Chief Executive Stephen Phipson said: “After a period of considerable uncertainty in global markets, these figures are an encouraging sign that manufacturers’ confidence is improving and, more importantly, being translated into growth and investment.
“However, one swallow doesn’t make a summer, and with UK and European markets in particular remaining anaemic it wouldn’t take much to knock prospects for further growth.It’s therefore essential that manufacturers’ fears of further costs as a result of the forthcoming Budget aren’t realised.
Government has made great strides in backing manufacturing with its industrial strategy and it must avoid imposing any further cost burdens which will hamper its number one mission of boosting economic growth.”
Recruitment intentions improved significantly to +15% from +1% (-3% in Q1) while investment intentions increased sharply to +25% from +2%. This suggests that pent up investment has been released, given that the balance in Q1 was also weak compared to Q2 at +5%. The survey found 70% of companies plan to invest in technology and automation.ReplyReply AllForwardEdit as new
