UK manufacturers are responding to shipping delays and rising demand for goods by tactically building stock levels as they approach the final quarter of the year, says a report from inventory management software company Unleashed.
Unleashed’s latest quarterly survey shows that small and mid-sized firms generated £365,565 in sales in Q2 2025, a 47% jump on the same period last year, and almost 2% on the previous quarter. At the same time, lead days rose from 15 to 27 days QoQ and the number of purchase orders (POs) jumped by 71% YoY, and more than doubled QoQ, from 144 to 292.
The figures appear in the latest manufacturing report from inventory management specialist Unleashed. It is based on data from more than 600 UK firms using their software, across manufacturing categories such as food and drink, clothing and fashion, and construction.
The report shows that manufacturers are building stock levels in a bid to maintain product availability and service levels in the face of the longer lead times. The surge in purchasing corresponded with an increase in the value of excess stock, which more than tripled QoQ from £21,239 to £65,007.
Profitability, measured as Gross Margin Percentage (excluding wages), also dropped marginally by 1.2 percentage points QoQ although firms saw a modest 0.2pp YoY uptick.
Joe Llewellyn, GM of ERP Small Business at The Access Group, the parent company of Unleashed, said the move towards ‘cautious buffering’ should help firms weather any further supply challenges over the coming months.
He said: “The rise in POs and stock levels marks a tactical pivot for manufacturers, with cautious buffering designed to mitigate the risk of delays and stockouts, particularly among those exposed to consumer sectors ahead of Black Friday and Christmas.
“In many cases, this isn’t a knee-jerk reaction to market conditions but a measured response. As manufacturers become more data driven they’re able to improve their forecasting capabilities and reduce the risks associated with stock purchasing decisions.
“Looking ahead, there are promising signs that manufacturers will end 2025 in a good position. Sales are healthy, while separate figures show that business confidence has risen steadily every quarter this year. The Bank of England has also cut interest rates from 4.25% to 4%, while inflation is expected to fall below the 2% target. Taken together, this could contribute to margin recovery and selective growth.”
Of the manufacturing categories analysed, food saw the biggest jump in sales revenue at 60% QoQ, while drinks saw the sharpest rise in POs at 250%. Lead times jumped most dramatically in sports and recreation (175%), while the value of excess stock grew fastest in electronics and telecommunications – more than tripling from £24,743 to £94,034.
View the full Unleashed Manufacturing Health Index report.
