Make UK has warned that high and volatile industrial energy costs are continuing to place pressure on UK manufacturing, with new analysis produced with Ecotricity setting out the scale of exposure if rising electricity prices translate into weaker output.
The report, From Crisis to Stability: A Future Energy System for Manufacturers, argues that energy prices remain one of the most serious constraints on manufacturing competitiveness, profitability, and investment. It says 90% of manufacturers have seen energy bills rise at least moderately since 2022, while more than half identify energy costs as their biggest challenge over the coming years.
Among the most severe findings, 13% of manufacturers surveyed said further projected energy cost rises could threaten the survival of their operations. Make UK estimates that a 13% decline in manufacturing activity would equate to an annual economic loss of around £85bn, including roughly £50bn across the wider supply chain.
Although the largest energy-intensive operators remain heavily exposed, the pressure reaches well beyond steel, chemicals, glass, ceramics, and heavy process industries. Smaller manufacturers, with less purchasing power and fewer options for long-term hedging, often carry the same volatility with fewer tools to manage it. Where costs cannot be absorbed, companies are passing higher bills through to customers, delaying capital expenditure, reducing margins, or reviewing whether UK production remains commercially defensible.
Electricity pricing now reaches directly into decisions on automation, reshoring, electrification, and process decarbonisation. A factory considering electric heat, high-load machinery, on-site charging, or a shift away from gas has to assess not only the capital cost of equipment, but the long-term electricity price under which that equipment will run. When that operating cost sits above competing economies, investment cases weaken before machinery is ordered.
Manufacturers are being asked to electrify processes, reduce fossil fuel dependence, improve efficiency, and satisfy customers demanding lower carbon production. Those demands depend on affordable and reliable electricity. Where industrial power costs remain structurally high, decarbonisation becomes a cost penalty rather than a route into more competitive production.
The pressure also extends into infrastructure and control. Energy managers can improve procurement, monitoring, submetering, demand response, and efficiency, but those measures depend on available grid capacity, timely connections, and reliable system operation. Industrial sites are increasingly trying to match production schedules, flexible loads, on-site generation, and storage against power prices that can move quickly.
That operating reality connects with the wider shift in energy security, where the industrial control room now sits close to the centre of resilience. Clean power policy only becomes commercially useful when it translates into controllable, reliable, and affordable supply at the point of use, as wider work on industrial energy control rooms has already made plain.
The latest analysis adds force because it ties electricity cost exposure to factory survival rather than abstract competitiveness. Manufacturers can improve efficiency and invest in monitoring, but they cannot indefinitely offset a persistent structural price disadvantage through operational discipline alone. For energy-intensive and electricity-dependent sectors, power costs affect export potential, product pricing, automation decisions, and where future capacity is located.
Policy responses will be judged against practical factory outcomes: lower industrial electricity costs, faster grid connections, clearer support for efficiency and electrification, and a market design that does not make the UK a high-cost location for the production capacity it wants to retain. Electricity is being positioned as the backbone of cleaner manufacturing, but it has to be priced and delivered in a way that allows manufacturers to invest, compete, and keep production in the UK.
