UK factories hit by 'collapse' in orders as costs surge across manufacturing sector

"While output and investment show some improvement after a challenging end to last year, rising costs and weakening domestic demand are creating real pressures for businesses. The outlook for UK manufacturing remains precarious."

"A new survey from industry body Make UK paints a concerning picture for the sector, warning that demand from UK customers has collapsed in the first quarter of the year while confidence among manufacturers has fallen for the third consecutive quarter."

"The report highlights mounting pressures facing British factories, including rising energy costs, weak domestic demand and continued uncertainty in global markets. These challenges are now beginning to ripple through production plans, hiring decisions and investment strategies across the industry."

Britain's manufacturing sector enters 2026 in a weakened state, with factories experiencing a sharp decline in domestic orders and significant cost pressures. A Make UK survey reveals that demand from UK customers has collapsed in the first quarter, while manufacturer confidence has fallen for the third consecutive quarter. Rising energy costs, weak domestic demand, and global market uncertainty are straining production plans, hiring decisions, and investment strategies. Although output showed modest improvement compared to late 2025, the recovery remains fragile. Manufacturers are increasingly raising prices to offset higher costs, with 31 percent reporting price increases in Q1—the highest level since spring 2023. Energy price volatility, particularly following Middle East conflicts, has been a major cost driver.

Read at Business Matters