Thought Leadership

Manufacturing Outlook Report

Key insights into the trends shaping the sector’s future.

Read the 2026 report

UK manufacturing is proving both resilient and ambitious, embracing innovation and new opportunities while addressing the challenges ahead.

Manufacturing continues to be one of the UK's most important economic sectors. Make UK 2025 report states the sector contributes around £220 billion of output annually, accounting for 42% of UK exports, almost half of all business research and development expenditure, and supporting approximately 2.6 million jobs across the country.

Over recent years, our reports have consistently highlighted the resilience of UK manufacturers in the face of significant challenges. From inflationary pressures and rising energy costs to skills shortages and geopolitical uncertainty, the sector has continued to adapt, invest and innovate. While many of these challenges remain, the findings from this latest survey suggest that manufacturers are increasingly focusing on future opportunity rather than simply responding to disruption.

WEBINAR

2026 Manufacturing Outlook webinar

Tuesday 6 October | 14:00

Discover the latest insights from our autumn 2026 Manufacturing Outlook Report in this live webinar, where Crowe UK specialists share key findings and explore opportunities to help manufacturing businesses drive growth, improve resilience and strengthen supply chains.

Key findings

Our contributors combine extensive manufacturing sector experience with established industry networks, providing valuable insight.

The continued decline in apprenticeship starts should concern UK manufacturing. Rising wage costs, tax contributions, inflation and economic uncertainty are making employers more cautious about investing in new talent.

Gareth Jones
Managing Director, In-Comm Training Services

The challenges highlighted in this research echo the findings of our Mind the Gap report, which estimates that skills shortages cost the sector £5.2 billion annually. Strengthening the talent pipeline must remain a priority.

Ann Watson MB
CEO, Enginuity

Based on conversations with TSC members over the past year, it is unsurprising to see rising operating costs are the biggest barrier to growth. The increase in employer NICs and minimum wage, combined with the high cost of energy, makes it difficult for UK manufacturers to compete.

Richard Fallon
CEO, Technology Supply Chain

Record increases in electricity transmission charges (TNUoS), which are set to continue until 2031, combined with ongoing market volatility, are creating a challenging energy cost environment.

Liam Conway
Co-Founder, Greenfields Energy Group

Recent years have been characterised by increased HMRC compliance activity; there is now a noticeable shift towards supporting genuine innovation, creating an opportunity for more manufacturers to revisit the regime as they invest in AI, automation and process improvement.

Paul Cox
Partner, Corporate Tax, Crowe UK

The results show that many manufacturers are still trying to establish whether and how CBAM will affect them. With the regime starting on 1 January 2027, businesses should now be reviewing their import data and supply chains.

Jamie Mcleod
Director, VAT, Customs and International Trade, Crowe UK

The view that supply chain visibility and meeting CBAM requirements are also considerations of reshoring, rather than just mitigating supply chain disruption and decarbonisation, is positive for the future growth of UK manufacturing.

Hayley Lavery
Partner, Corporate Audit, Crowe UK

We're seeing overseas acquirers and strategic investors actively targeting niche UK manufacturers, providing the capital these businesses need to fund growth. This aligns with the increased M&A activity we're witnessing across the sector.

George Lawford
Director, Corporate Finance, Crowe UK

Defence presents a major opportunity for UK SMEs, but the key question is how they access it. We need practical mechanisms that connect non-traditional suppliers into the right opportunities while ensuring SMEs are properly represented in shaping those routes.

Sam Baynham
Managing Director, ConeX Portal

Integrated System Technologies' adoption of AI was measured, not assumed. In product design, electronic design and software development, we now iterate concepts, evaluate designs and generate test code in hours rather than years.

Geoff Archenhold
CEO, Integrated System Technologies

What next

The findings from this year’s Manufacturing Outlook Report demonstrate the resilience of the UK manufacturing sector in the face of ongoing economic and operational challenges.

UK manufacturing has proven its ability to adapt and innovate through challenging conditions. As the industrial strategy develops, digital transformation accelerates and new market opportunities emerge, the sector remains a key driver of economic growth.

At Crowe, we're proud to support British manufacturers and help drive innovation, investment and growth across the sector.