In this blog, Eleri Roberts, Made Smarter Business Engagement Manage explores the latest Make UK and BDO Outlook for Quarter Four. It is a story of resilience, cautious optimism and a sector that keeps moving forward even when the wider economic picture feels uncertain.
What stood out most to me is how manufacturers continue to deliver positive results despite a year of rising costs, global trade disruption and a cyber incident that temporarily shook one of the UK’s biggest automotive players. Output is still growing, domestic orders have bounced back strongly and investment intentions remain surprisingly upbeat.
At the same time, there is no hiding from the challenges. Recruitment has slowed right down. Labour costs are rising. Export conditions are becoming more unpredictable. Confidence in the wider economy has dipped. It feels like the sector is holding its breath a little as we head into 2026.
One of the most striking figures in the report is the number of unfilled roles. There are now around 48,000 vacancies across UK manufacturing. That is a huge amount of lost potential output and a clear sign that the skills gap is still widening.
Many businesses have paused hiring because of rising employment costs and uncertainty around upcoming changes to employment law. But the demand for people has not gone away. If anything, it is becoming more urgent.
Despite the cautious mood, manufacturers are still planning to invest. The report shows one of the strongest readings for investment intentions since early 2022. That tells us something important. Businesses want to modernise. They want to improve productivity. They want to build resilience. They just need clarity and confidence to make the right decisions.
For the first time in a while, margins have moved into positive territory. Input costs are rising more slowly than output prices, which is giving manufacturers a little more space to breathe. It is a welcome shift after several years of relentless cost pressure.
Reading through the report, it is clear that the areas causing the most pressure are the same areas where digital transformation can make the biggest difference.
Made Smarter can support manufacturers by:
- Helping them build digital skills and leadership capability
- Improving productivity through automation, data and smarter processes
- Strengthening cyber security, which feels more important than ever after the JLR incident
- Giving businesses the confidence to invest through expert advice and digital roadmapping
The sector is ready to grow. The ambition is there. The appetite for investment is there. The challenge now is making sure manufacturers have the tools, skills and support to turn that ambition into real progress.
