15th Dec 2025 08:34
(Alliance News) - Manufacturers in the UK have had a volatile year but there are positive signs ahead, according to a new report published Monday.
Research among 263 companies by Make UK and BDO showed that recruitment intentions weakened "significantly" in response to speculation in the run-up to the budget as companies feared further tax rises and increased labour costs.
Manufacturing firms were more upbeat at the end of the year, but the report cautioned against a period of stronger trading, as growth forecasts for the sector remained weak with output forecast to grow by just 0.5% this year and contract by 0.5% in 2026.
James Brougham, senior economist at Make UK, said: "After a difficult 12 months when manufacturers have faced multiple challenges across all fronts, it's a relief to see the year ending on a more positive note.
"However, the prospects for any form of significant growth remain remote and, with rising employment costs and any help on energy still well over the horizon, companies will have little inclination to fill up the punch bowl to start the party.
"It's now essential that government brings forward the proposed energy support scheme and, at the same time, extends it right across the sector so the broadest possible range of companies are covered.
"With firms set to take a hit on increased employment costs employers also want to see reassurances from government that the upcoming Employment Rights Bill will not add further financial burdens on businesses, otherwise the jobs market will remain weak."
Richard Austin, head of manufacturing at BDO, said: "This year has been a volatile one for UK manufacturers. Whilst the last six months have shown tentative signs of growth in output and orders, the sector is lacking the confidence and assurance they need to put their hands in their pockets and invest."
By Alan Jones, Press Association Industrial Correspondent
Press Association: Finance
source: PA
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