The report, published on December 15 2025, warns that underlying conditions still remain fragile despite these positive reports, with recruitment intentions weakening sharply and business confidence falling for the second consecutive quarter.
The survey found that while output and orders held up in the final months of 2025, manufacturers remain cautious about the year ahead. Growth forecasts for the sector are subdued, with output expected to rise by just 0.5 per cent this year before contracting by -0.5 per cent in 2026.
Make UK also published new analysis highlighting the potential economic boost if the UK matched OECD investment levels by 2035. Over the past decade, UK investment intensity averaged 17 per cent of GDP compared to 22 per cent across the OECD.
Closing this gap would require annual increases of just 0.5 per cent, generating an additional £670 billion in public and private investment over the next decade. Of this, manufacturers could contribute around £44 billion, accounting for 11 per cent of the private sector total, the researchers claim.
In a statement, James Brougham, Senior Economist at Make UK, said: “After a difficult twelve 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 including National Living Wage rises, employers 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.”
More from Machinery
Richard Austin, Head of Manufacturing at accountancy and business advisory firm BDO, added: “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.
“Last month’s Budget gave manufacturers some relief in terms of investment, green transition and some positive skills measures but it fell short in addressing some of the biggest concerns the sector is facing. Businesses need decisive action if growth is to be realised.”
Survey data reflects this cautious outlook: the balance on output eased to +13 per cent from +25 per cent in Q3, though expectations for the next quarter improved to +19 per cent. Total orders fell to +3 per cent from +16 per cent but are forecast to rebound to +19 per cent.
UK and export orders were level at +20 per cent in Q4, but international trade is expected to weaken significantly next quarter, with export orders predicted to drop to +3 per cent compared to UK orders at +27 per cent.
Recruitment intentions fell sharply to +3 per cent from +15 per cent, while investment intentions eased to +19 per cent from +25 per cent, which the researchers said is still high by historic standards, but well below earlier optimism.
The survey of 263 companies was conducted between October 27 and November 20, 2025.
