Make UK finds a quarter of manufacturers are moving production overseas

Manufacturers and unions are calling for UK Government action as rising costs threaten domestic industry.

Stock image of buildings in a large manufacturing complex in the UK

A large logistics and manufacturing complex in Lutterworth, UK

This follows Make UK’s quarterly Manufacturing Outlook report, which identifies that 9% of companies have already moved activity overseas due to higher business costs, with a further 16% considering doing so. This is due to increasing costs in the UK business environment.

Despite a promise in the British Government's 2025 Industrial Strategy of ‘bold action’ to bring down energy costs, trade body Make UK claims nothing has yet been delivered to support businesses.

The organisation, backed by the Trades Union Congress, is warning ministers that manufacturers’ patience has run out. ‘Britain faces deindustrialisation unless manufacturers get relief from high energy prices,’ according to Make UK CEO Stephen Phipson.

He adds that the government needs to ‘expand the British Industrial Competitiveness Scheme to all of the manufacturing industry and speed up delivery’.

Almost half (46%) of the companies surveyed have seen a further increase in their energy bills since the start of the conflict in the Middle East. That is on top of increased employment costs from the increase in National Insurance Contributions and raising of the threshold at which they are paid.

These costs are reportedly exceeding companies’ ability to raise prices, squeezing profit margins and burning through cashflow. More than a quarter of those surveyed say they have less than 12 months of cash left, while one in 10 say they are likely to become insolvent in the next year.

In response, 38% of companies say they have delayed investment and 21% have reduced their headcount.

Make UK is calling for the proposed British Industrial Competitiveness Scheme to start earlier than 2027 and expanded to 130,000 companies across the whole manufacturing sector, not just the 10,000 it is currently aimed at.

‘We also need a long-term plan to support workers in manufacturing industries and bring bills down for good through energy efficiency and decarbonisation,’ says Paul Nowak, General Secretary of the Trades Union Congress.