Manufacturers warn UK faces ‘tipping point’ on competitiveness
The Labour government has been handed a major warning over the future of the manufacturing industry as the sector battles rising costs and pressures to shift business to shift overseas.
A fresh survey from the sector’s industry body Make UK showed senior executives in manufacturing firms feared cost pressures would soon reach a “tipping point”.
Whilst the executives showed some optimism that the year ahead could provide some opportunities for success, they sounded the alarm over investment plans facing cancellation or shifting overseas.
“Manufacturers have demonstrated their resilience over and over again in recent years and those that remain innovative and are prepared to invest in new technologies, expanding markets and, most crucially, their people, will continue to thrive,” Stephen Phipson, chief executive of Make UK, said.
The latest UK Manufacturing Purchasing Managers’ Index (PMI) from S&P Global UK showed the sector hit a 15-month high in December as the industry continued to grow for the second consecutive month.
Manufacturers hit by JLR cyber attack
The industry faced a crippling 2025 thanks in part to a cyber attack at Jaguar Land Rover which led to manufacturing being halted for five weeks from September 1, triggering a £1.9bn hit.
The restart JLR’s of production handed the sector a major boost, helping supercharge supply chains across the country.
But the latest PMI growth would be tested in the months to come after the industry managed to get back on the front foot from temporary boosts from new orders.
Phipson said manufacturers can only thrive “if they are operating in the most favourable business environment and, despite the commitment to an industrial strategy, not only is growth anaemic but the warning lights are now flashing red on the UK as a competitive place to manufacture and invest.”
Over two thirds of the 174 companies surveyed in the Make UK report said they would bring forward investment in the event of an industrial strategy that drives growth.
“The Government promised significant change – now is the time to deliver it,” Phipson said.
A Government spokesperson said: “We are pleased businesses are positive about our modern industrial strategy, which will give them the backing they need to continue to grow in 2026.
“We know the cost of energy is one of the greatest challenges facing industry – and this Government is acting to tackle it, with thousands of manufacturing businesses to see their electricity bills cut by 25% through the British Industrial Competitiveness Scheme.”