Rising costs are pushing UK manufacturers dangerously close to an investment tipping point, with businesses warning that planned spending could be cancelled or moved overseas unless pressures ease.
A new survey by Make UK, the manufacturing trade body, found that almost nine in ten industry leaders expect employment costs to rise this year, while two thirds anticipate higher energy bills. The findings underline mounting concern that the cost base for British manufacturing is becoming unsustainable.
The survey of 174 senior manufacturing executives revealed that 65 per cent see rising business costs as one of the biggest risks facing the sector in 2026. Make UK warned these pressures are now “threatening to reach a tipping point”, beyond which firms may be forced to scale back investment or relocate activity abroad.
Confidence in the UK as a place to invest remains fragile. Just over four in ten manufacturers believe Britain is an attractive destination for investment, a view shared by a similar proportion of overseas-owned firms operating in the UK. Against this backdrop, Make UK forecasts the manufacturing sector will shrink by 0.5 per cent this year.
Despite these concerns, the survey also revealed pockets of cautious optimism. Nearly two thirds of respondents said they believe opportunities will outweigh risks over the year ahead, while 57 per cent still regard the UK as a competitive place to manufacture.
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