The latest Make UK and BDO insights reveal that Q1 2025 saw declining output, waning orders, and a sharp drop in business confidence—the most acute since the pandemic. With half of manufacturers freezing recruitment, over one in four contemplating redundancies, and many delaying investments, the sector faces mounting pressures.
Growth forecasts for 2025 have been revised to a contraction of approximately 0.5 per cent. Still, there remains cautious optimism—chiefly tied to the newly released Industrial Strategy. Over half of senior leaders plan to boost investment in response, while four in ten anticipate gains in productivity and skills access.
How we can help you
As an industry and technology-agnostic system integrator and automation solutions provider with deep expertise in power conversion, control, automation, and digital technologies, we are uniquely positioned to help manufacturing leaders turn adversity into advantage, partnering with you on industrial asset lifecycle challenges. We help you to:
- Optimise energy consumption, tame ballooning operating costs and plot your net zero roadmap
- Maintain operational resilience amid recruitment freezes—through site assessments, automation, digitisation and comprehensive service support
- Accelerate productivity gains using tailored platform-agnostic automation solutions
- Understand your industrial investment roadmap in the short and long-term
- Navigate the new policy landscape with practical, scalable deployment of safety-focussed solutions
If your organisation is evaluating how best to invest in productivity, innovation, and cost control in the months and years ahead, let’s explore how we can help bridge strategy and execution – ensuring growth, even in these turbulent times.
Below is our summary of the Make UK and BDO insights :
1. Manufacturing Output & Orders – Q1 2025
- Sharp decline: Q1 marked the first time in a decade that manufacturing output fell in the first quarter.
- Domestic and export orders both eased significantly.
- Business confidence plunged in late 2024 at its fastest pace since the pandemic. Result: frozen recruitment by 50% of firms, more than a quarter considering redundancies, and delayed investment by a third.
2. Growth Forecast Revisions
- Growth forecast for 2025 downgraded to –0.5%, down from a prior +0.2% (or –0.2% depending on reading). Signs point to a contraction this year, with hopes of modest recovery in 2026.
3. Executive Sentiment & Strategic Expectations
- Despite cost pressures—rising wages, soaring energy bills, and higher taxes—senior executives retain cautious optimism.
- The newly launched Industrial Strategy framework is viewed as a vital enabler:
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- 50%+ of manufacturers plan to increase investment in response.
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- 40%+ expect improved productivity and better access to necessary skills.
- However, business optimism is balanced by expectations of potential economic deterioration.
4. Policy Developments
- A long-awaited Industrial Strategy launched in June 2025, following near-decade Make UK lobbying: a substantial policy win providing necessary long-term certainty for investment.
Additional Context from Press
- The Steel Industry (Special Measures) Act 2025 passed in April to secure continuity of primary steel production—indicative of the government’s readiness to intervene in critical sectors.
- The Spending Review 2025 earmarked £15 billion for infrastructure projects (transport in Midlands, North, and West), which could benefit supply chain connectivity.
