Mood shifts as manufacturer confidence plummets

The Manufacturing Outlook Q4 survey - carried out between 28 October and 27 November – showed business confidence dipping at the sharpest rate since the pandemic. Despite output and employment on the rise, and investment levels remaining stable, overall optimism fell for the first time since Q4 2023. 

Increased costs are fingered as the main culprits for the decline, compounded by further cost rises ahead due to the recent Labour budget (October 30). According to the survey, 70 per cent of manufacturers have seen costs increase by up to a fifth in the last year, while almost one in ten (8 per cent) saw costs rise by up to a half. Meanwhile, 86 per cent believe their business costs will increase specifically due to new employment reforms – including an increase in Employer National Insurance - with 44 per cent saying the increase will be ‘significant’.

“Having faced a cost creep for most of the year, manufacturers are now facing a cost crisis which has brought a sharp dip in their confidence,” said Fhaheen Khan, senior economist at Make UK.