Manufacturing Outlook 2026 Q3
14.09.2026
The latest Manufacturing Outlook shows a sector still under pressure. While demand and confidence have improved, many manufacturers remain cautious about taking on new staff as employment, energy and input costs continue to weigh on business decisions.
Published by Make UK in partnership with S&W, the Q3 report explores the latest trends in output, orders, recruitment, investment and business confidence across UK manufacturing.
- Manufacturers are holding back on recruitment, despite signs of improving demand.
- Hiring intentions have weakened sharply, suggesting firms are still cautious about expanding their workforce.
- High employment, energy and input costs continue to affect confidence and investment decisions.
- Orders and business confidence have improved, but the recovery remains fragile.
- Investment intentions are moving in the right direction, although many firms are still looking for greater certainty before committing to growth plans.
- Turning improved confidence into jobs will depend on easing cost pressures and giving manufacturers the confidence to plan ahead.
A cautious recovery
The report points to a mixed picture for manufacturers. There are encouraging signs in the outlook for orders and investment, but the improvement has not yet translated into stronger recruitment. For many firms, the cost of doing business remains too high to make major hiring or expansion decisions with confidence.
This matters for the long-term strength of the sector. Without stronger recruitment, manufacturers may find it harder to build the skills, capacity and resilience needed to respond to future growth opportunities.
What the report covers
- Output and order trends across UK manufacturing
- Recruitment and employment intentions
- Investment plans and business confidence
- Domestic and export market performance
- Price pressures and wider business conditions
- Forecasts for manufacturing growth
The sharp slowdown in recruitment shows that high employment, energy and regulatory costs are forcing firms to think twice before taking on new people.
"Manufacturing makes up ten per cent of the UK economy and could be vital to delivering the Prime Minister’s priorities. But our members can only grow and invest if the Autumn Budget brings those costs and burdens down."Without action, ministers risk shutting people out of well-paid manufacturing careers and weakening the skills base the country needs for future growth.
Manufacturers are becoming increasingly optimistic about their prospects, but caution remains a defining theme across the sector. Rising employment, energy and other costs continue to put pressure on margins, meaning many businesses are having to be highly selective about where they invest.
“Manufacturers want to invest, expand and take advantage of improving demand, but many are looking for greater certainty before making significant commitments. The improvement in confidence and growth forecasts is encouraging, but translating that momentum into sustained growth will require an environment that gives businesses the confidence to invest, recruit and plan for the long term.
