The Chancellor's Budget on 28 October comes at a pivotal moment for UK manufacturing. Businesses are balancing growth ambitions with persistent cost pressures, evolving global trade dynamics, labour shortages and the increasing need to invest in productivity and sustainability.
Crowe UK's Manufacturing Outlook Report 2026 highlighted a sector that remains optimistic and ambitious, despite the challenges it faces. Investment in technology, AI and automation continues to rise, but manufacturers are also struggling with skills shortages, rising operating costs and growing regulatory complexity. Against this backdrop, many businesses will be looking to the Budget not for short-term interventions, but for policies that provide certainty and encourage long-term investment.
Alongside new measures, manufacturers need clear and accessible routes to existing support. Initiatives such as ManufacturingUK.org have an important role to play by bringing relevant guidance, resources and opportunities together in one place.
What five points would be on a realistic wish list for manufacturers?
1. Creating the confidence to invest
Manufacturers make long-term investments in equipment, technology and people, often planning several years ahead.
Recent measures to encourage business investment have been welcomed, but manufacturers are looking for greater certainty that support will continue. Stable policies give businesses the confidence to invest in productivity improvements, automation and new technologies.
Manufacturers will therefore be hoping the Budget reaffirms the UK's commitment to supporting investment and innovation.
2. Reigniting innovation
Innovation remains one of the UK's greatest manufacturing strengths, but is there more the system could do to encourage it?
Since changes to the R&D tax relief regime were introduced, the financial benefits available for profitable SMEs have become less attractive. Manufacturers are calling for a more attractive and certain framework to support innovation and growth.
The Budget presents an opportunity to strengthen the UK's innovation ecosystem by improving certainty around R&D tax reliefs and simplifying the claims process.
Manufacturers would also like to see the Patent Box regime reviewed. This is valuable for companies that sell products with certain patents but take up is low. While it continues to provide value, a more competitive approach could further encourage innovation, investment and the commercialisation of intellectual property in the UK.
3. Addressing energy costs and competitiveness
Energy remains one of the most significant challenges facing UK manufacturers. Many continue to face higher costs than international competitors, putting pressure on margins and limiting the funds available for investment.
The British Industrial Competitiveness Scheme (BICS) is a welcome step and is intended to reduce electricity costs for eligible manufacturers from 2027. However, it will not apply to every business across the manufacturing supply chain, meaning many could continue to face significant cost pressures.
Long-term plans to create a cleaner and more resilient energy system may help improve competitiveness over time, but manufacturers also need more immediate support.
The sector will therefore be looking for measures that help businesses manage costs now, while continuing to invest in growth, efficiency and decarbonisation. More detail on the planned creation of Great British Grid as part of the Government's 10-year plan to lower UK energy costs to European averages would also be welcomed.
4. Supporting defence and aerospace diversification
The Government’s Defence Investment Plan sets out significant investment in equipment, technology and domestic supply chains, creating potential opportunities for UK manufacturers.
At the same time, parts of the automotive supply chain continue to face pressure from high operating costs, tariffs and international competition, as highlighted by the Confederation of British Metalforming.
This is prompting some businesses to explore opportunities in defence and aerospace. However, entering these markets can require new accreditations, capabilities and relationships. Manufacturers would therefore welcome practical support to help them navigate procurement processes, meet sector requirements and access genuine supply chain opportunities.
ConeX Portal UK helps manufacturers and engineers connect, collaborate and navigate supply chain challenges, particularly within the defence and aerospace sectors. Supporting SMEs and simplifying access to opportunities in line with the Government’s industrial and defence priorities should remain a key focus.
The opportunity clearly exists. The challenge is ensuring businesses can access it.
5. Investing in the next generation of manufacturing talent
Skills shortages remain a major barrier to growth, with manufacturers struggling to recruit technical talent while experienced employees approach retirement.
Manufacturers would welcome greater investment in apprenticeships and vocational training, alongside more flexible funding for shorter courses, upskilling and reskilling. Greater flexibility in apprenticeship and training funding would help manufacturers develop the skills they need. The government could also work more closely with industry, education providers and organisations such as Enginuity to ensure training reflects the sector’s changing needs.
Making training easier to access and fund would help manufacturers protect vital knowledge and build the workforce needed for future growth.
Looking ahead
Manufacturers are not expecting the Budget to solve every challenge facing the sector. However, they will be hoping for a clear signal that government recognises the pressures businesses are facing and the contribution manufacturing makes to the UK economy.
The common thread running through this wish list is certainty. Whether it is investment incentives, innovation support, skills development, energy policy, or supply chain opportunities, manufacturers want the confidence to make long-term decisions.
As Crowe UK's Manufacturing Outlook Report 2026 demonstrates, the sector remains ambitious and willing to invest. The question many manufacturers will be asking on 28 October is whether the Budget provides the environment needed to turn that ambition into growth.
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