Domestic manufacturing orders drop sharply, reveals Make UK
The trade body cites 'collapsing domestic demand' and rising costs, even as output and investment hold steady.
Make UK’s latest Manufacturing Outlook report shows that, while production edged up in the first quarter of 2026, after a post-Autumn Budget slump at the end of last year, recovery remains modest and fragile amid persistent uncertainty around orders and costs.
The survey of 215 companies was carried out between 28 January and 19 February, prior to the latest Middle East conflict and the resulting volatility in global energy markets.
Its survey suggests the sector is set to grow by 0.9% in 2026, a slight rebound after contracting by 0.2% in 2025, but the outlook is precarious.
Escalating tensions with Iran, and related disruption to shipping routes through the Strait of Hormuz, could push energy prices even higher and further upset global supply chains.
Make UK says, 'For a sector already facing some of the highest industrial energy costs among major economies, any sustained increase in oil and gas prices could add further pressure to business margins and input costs.'
Manufacturers are also closely monitoring potential knock-on impacts on shipping costs and delivery times, which could affect access to raw materials and components.
At the same time, rising employment costs following the passing of the Employment Rights Act and increases to minimum wages announced in the Autumn Budget are found to be adding further pressure, helping explain why business confidence has dipped for a third consecutive quarter.
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