09.03.2026

Manufacturing is central to the UK’s future growth, innovation and global competitiveness. But the sector now faces a critical challenge that could determine its success over the next decade: skills.

Make UK’s latest report, The Shape of British Industry, examines the current state of UK manufacturing and the forces that will shape the sector’s future. The findings are clear — without bold reforms to the UK skills system, the ambitions of the Industrial Strategy risk being left behind.

Our research highlights the scale of the challenge facing manufacturers.

Skills are the number one driver of growth

  • 99% of manufacturers say access to skills will shape their future growth plans
  • Half say skills shortages are currently their biggest barrier to growth

SMEs face a scaling barrier

  • Talent shortages are the single biggest factor preventing SMEs growing into larger firms

Concerns over the education pipeline

  • 39% of companies believe the current education system cannot deliver the skills industry needs

The future of manufacturing is digital

  • 65% of manufacturers plan major investments in digitalisation and AI
  • A highly skilled workforce will be essential to unlocking productivity gains

Opportunity to address youth unemployment

  • Two thirds of companies expect to employ more people in 2035 than today

A Call for Bold Skills Reform

Manufacturers are urging government to move faster and further on skills reform.

More than £1 billion raised from businesses through skills levies remains unused, despite widespread labour shortages across industry.

Make UK is calling on the Treasury to release these funds to support employer investment in training, which could help deliver over 235,000 new apprenticeship starts.

Unlocking this funding would help:

  • Address the growing skills gap
  • Support SME growth
  • Boost productivity
  • Create opportunities for young people across the UK

Why This Matters for the UK Economy

Manufacturing remains a cornerstone of the UK economy, driving innovation, exports and regional growth.

But with global competition intensifying, an ageing workforce and rapid technological change, the sector’s success will increasingly depend on access to highly skilled talent.

The decisions taken now on skills policy will shape the future of British industry

Download the Report Below

Discover the trends shaping UK manufacturing and the policy reforms needed to support the sector’s growth.

Available resources