08.06.2026

UK manufacturers could unlock major productivity gains through artificial intelligence, but skills shortages and low levels of adoption are holding the sector back, according to a new Make UK report.

The findings highlight a sector still in the early stages of AI adoption, despite growing recognition of its potential to improve efficiency, productivity and resilience.

  • Only 2% of manufacturers say AI is widely embedded across their operations
  • Fewer than 40% are using AI in some areas, while nearly 1 in 5 have not adopted it at all
  • AI is mainly used in back-office functions, with 83% using it in HR, finance and admin
  • Over 50% of manufacturers cite skills shortages as the main barrier to adoption
  • Core operational use remains limited, including 11% in production, 7% in supply chain and 6% in quality control

What’s happening in UK manufacturing?

While AI is already helping some firms streamline administrative processes, most manufacturers remain stuck at pilot or early adoption stage. Use cases are still heavily concentrated in back-office functions rather than production, supply chain or quality control.

However, expectations for change are growing rapidly, with nearly half of manufacturers expecting AI to significantly reshape jobs and working practices within the next two years.

Rather than replacing roles, AI is increasingly being used to support workers — from predictive maintenance in engineering to AI-assisted scheduling and improved quality inspection processes.

The skills challenge holding back adoption

The biggest barrier to scaling AI is not technology, but capability.

Manufacturers are prioritising practical skills such as data literacy, problem solving, leadership and change management, but many report limited time and clarity around how to build these skills effectively.

More than half of firms say skills shortages are preventing them from moving beyond small-scale trials into full implementation.

What needs to change

To accelerate adoption, the report calls for:

  • Nationally recognised AI skills standards for manufacturing roles
  • More practical support for SMEs adopting AI
  • Flexible, shift-friendly training for factory environments
  • Responsible, workforce-centred adoption of AI
  • Stronger support through programmes such as Made Smarter

It also highlights the need for more manufacturing-specific AI training aligned to real-world industrial use cases.

Why you should read this

AI is already reshaping how manufacturing businesses operate, but the benefits are uneven and early-stage. This report shows where adoption is happening, where it is falling behind, and what is needed to turn AI from isolated pilots into sector-wide productivity gains.

With billions in potential output at stake, understanding the skills and adoption gap is critical for manufacturers, policymakers and educators alike.

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