2025 has been another challenging year for the UK’s manufacturing sector, with inflation remaining high and tax increases continuing to constrain significant investments. Looking forward to 2026, we fear there will be more of the same.
Cost of borrowing will remain high.
Interest rates are not expected to ease in the near future, meaning the cost of borrowing remains high and manufacturers must prioritise investments that will deliver a clear productivity or efficiency gain. Investments that cannot deliver value for money in these areas will likely be temporarily shelved.
Autumn budget drives further uncertainty.
Recent fiscal changes have resulted in adjustments to investment strategies. With pre-Autumn Budget discussions hinting at further tax rises, manufacturers are holding firm against unnecessary spending.
Spend only where investment is necessary.
In the short term, it is likely that manufacturers will only invest in priority areas such as skills, technology, and business resilience. Recruiting, upskilling, and retaining a talented workforce is critical to weathering the economic storm, while digital innovation and investment in machinery, such as bending machines from companies such as /www.cotswold-machinery-sales.co.uk/euromac-bending-machines/horizontal-bending-machines, can accelerate product deliveries while maintaining quality and accuracy.
Learn from experience and adopt best practice.
Manufacturing businesses must learn from the experiences of their global peers and implement best practice recommendations in the fields of automation and digitisation if they are to remain competitive. Upskilling the existing workforce is one of the best ways to build business resilience, but developing a strong recruitment and retention strategy will be key to exploiting future opportunities and making sound, risk-based investment decisions.
