Make UK/BDO Manufacturing Outlook Report – Q1 2024

Make UK/BDO Manufacturing Outlook

Make UK/BDO Manufacturing Outlook

Manufacturers’ confidence remains robust despite weak economy

UK manufacturers are facing the prospect of two years of anaemic growth, with the latest forecasts suggesting the sector will remain flat this year and grow by just half the rate of the overall economy in 2025. However, despite this, confidence levels among manufacturers remain robust with investment and recruitment intentions holding up.

Behind the overall picture are some underlying sectoral and regional imbalances, with the electronics, aerospace and food and drink subsectors powering ahead, whilst the South East and Wales are performing significantly better than other UK regions and nations. 

Our Make UK/BDO Manufacturing Outlook report details the results from our latest survey, in partnership with Make UK, into the performance of manufacturers across the UK. 

Download the Q1 report for detailed insights into the performance of UK manufacturers over the past three months across our core indicators – confidence, output, orders, employment, and investment – including expectations for 2024. 

Download Q1 Report


If you would like to discuss any of the topics raised in this report, please get in touch with Richard Austin or your dedicated BDO Manufacturing partner.

Download our Make UK/BDO Q1 Manufacturing Outlook Report for detailed manufacturing sector insights.

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The Manufacturing Outlook campaign is a Make UK/BDO partnership providing the most comprehensive barometer of the economic climate facing UK manufacturers, providing up-to-date and detailed intelligence on the state of manufacturing across the UK economy. It is important to us that we understand the challenges that you face in running your manufacturing businesses. It helps us use our skills, experience, and knowledge to make a tangible difference to your business.

The manufacturing industry is hugely important for the UK economy, trade and investment. UK manufacturing employment stands at over 2.5 million people and manufacturing accounts for 51% of all UK exports. Manufacturing also accounts for 15% of total UK business investment and 64% of all UK business research and development.

The turn of the decade brought with it refreshed optimism for the UK manufacturing industry however, this waned quickly as the COVID-19 pandemic spread across the globe. The pandemic brought with it a lot of challenges, from overnight factory closures, disrupted supply chains to prioritising the health and safety of employees. Alongside this, the EU–UK Trade and Cooperation Agreement (TCA) impacted the flow of goods, with many manufacturers experiencing delays at borders.

The sector continues to prove its resilience as it navigates the challenges it faces, and our quarterly Manufacturing Outlook reports clearly demonstrates the impact of these. Over recent years we have seen a series of the worst and best figures ever reported by our Manufacturing Outlook survey.

  • The latest output balance indicates that a substantial share of businesses have experienced declining output volumes, although across the industry a small percentage of manufacturers reported improved output volumes. As order books showed strong signs of slowing down towards the end of 2023 it was inevitable that output volumes would follow suit with manufacturers making more efficient use of their inputs.
  • A strong pipeline of orders has supported the manufacturing industry since early 2021 as global economies began to reopen their doors and consumers were eager to spend their pent-up savings. However, the previous two quarters of activity have indicated a marked slowdown in the balance of manufacturers reporting increasing order books. 
  • Following signs that higher interest rates were successfully cooling inflation, the latest figures suggest there has been an increase in the number of manufacturers passing price increases onto their customers. However, margins worsened despite price rises suggesting that manufacturers are working hard to shield their earnings.
  • Employment in the sector, since the end of the pandemic, has been particularly resilient to short-term shifts in the overall outlook, chiefly due to companies prioritising the retention of labour and skills. In previous times, firms may have been more readily prepared to reduce headcount in times of challenging business conditions, but the seismic shift in the post-pandemic labour market has caused a grand rethinking of this usual behaviour, in favour of ensuring skills retention. The lack of both specialist skills and general labour availability has forced the sector to take a more retentive view of labour.