Investment Monitor 2025
27.10.2025
A new report from Make UK and RSM UK reveals that the Government’s Industrial Strategy could deliver an immediate uplift in manufacturing investment - with over a third of companies planning to accelerate projects as a direct result of the announcement.
Investment momentum builds
The Investment Monitor 2025's findings show a clear appetite for growth:
- 37% of manufacturers say they will increase investment following the Industrial Strategy announcement.
- Three quarters expect to benefit from commitments in the Advanced Manufacturing Plan, which focuses on supporting innovation and future-facing technologies.
However, the data also highlights the challenges ahead. Investment intensity — the proportion of turnover reinvested into business growth - has fallen to its lowest level since the EU referendum. Last year, that figure stood at a ten-year high. R&D intensity has also dipped slightly, to 6.2%.
With almost four in ten firms basing their investment decisions on the availability of tax incentives, Make UK and RSM UK are calling on Government to use the forthcoming Budget to make it quicker and easier for manufacturers to access reliefs.
Stability is also critical: frequent changes to tax policy remain one of the biggest barriers to business confidence and long-term planning.
For the first time, skills development has overtaken plant and machinery as manufacturers’ top investment priority for the year ahead - 47.6% versus 44.1%.
Despite economic uncertainty, the sector continues to back its workforce and innovation potential:
- 68% of manufacturers invest up to 10% of turnover in plant and machinery.
- 68% also invest up to 10% in R&D.
- Around one in five invest between 10% and 50% of turnover in these areas.
The message from UK manufacturers is clear: the Industrial Strategy has set the stage for renewed confidence, but sustained growth will depend on stable, simple, and targeted investment incentives that empower firms to innovate, upskill, and compete globally.
Manufacturers have long called for an industrial strategy and it’s clear that this is set to bring immediate benefits in terms of accelerating investment projects. However, it’s clear that we’re at a critical juncture for investment, and there is a real sense of urgency. The forthcoming Budget must not only safeguard current incentives but, refine them with a set of carefully targeted measures to focus on boosting the take up of accelerating technologies and innovation.
“Furthermore, the statement should end the frequent tax changes to incentives we have seen in recent years by committing to a business tax regime which is set in stone for the lifetime of this Parliament.
Despite headwinds, UK manufacturers remain optimistic, but to allow them to transform, invest and drive future prosperity they need a helping hand from the government, not more taxes.
“Simplification is key here. We know tax reliefs influence investment decisions, so the chancellor has a real opportunity to make them more accessible and easier to claim in the forthcoming budget. This will not only boost investment but drive innovation, improve productivity and accelerate economic growth through industry.
