Manufacturing output continues to decline, says the º£½ÇÊÓƵ's largest industry body, as leaders call on Chancellor Reeves to support training and technology policies with "short-term delivery."
The º£½ÇÊÓƵ government unveiled its much-anticipated industrial strategy earlier this week, highlighting sectors of the economy with the most potential for growth, including advanced manufacturing and clean energy industries, as reported by .
However, a recent survey by the CBI reveals that manufacturers have experienced a drop in production of up to 23 per cent in the three months to June, mirroring levels recorded for the quarter leading up to May.
Researchers found that 15 out of 17 sub-sectors reported a decrease in output, including the º£½ÇÊÓƵ's massive chemicals sector, while several mechanical engineering firms also noted a reduction in production.
Manufacturers also reported that order books, both domestically and internationally, remained significantly below the long-run average.
New data highlights the challenges manufacturers across the country are facing, with increased employment taxes introduced by Reeves and low demand levels, partly due to a weak global economic outlook and trade tensions, placing immense pressure on this vital sector.
Manufacturers are calling for swift action
Business leaders are currently dissecting the details of the industrial strategy, with further consultations set to determine which firms will benefit from subsidies that could reduce electricity bills by a quarter.
The government's Spending Review also highlighted plans to invest in skills and training, as restrictions on immigration pose a challenge to the strength of Britain's workforce.
CBI's chief economist, Ben Jones, stated that high energy costs and widespread skills shortages have impacted manufacturers, with business owners now expecting the government to "dismantle barriers to growth."
"With long-term strategies presented, the government must now continue to back up its ambitions with short-term delivery," said Jones.
"This includes rolling out welcome energy cost interventions as soon as possible, delivering on growth and skills levy flexibility, and pushing technology adoption to boost productivity."
Elliott Jordan-Doak from Pantheon Macroeconomics noted that the CBI's latest industrial trends survey data had "bright spots," suggesting that the sector is beginning to recover from the upheaval seen in April following Trump's introduction of sweeping tariffs.
"We are optimistic that the worst of the slowdown in manufacturing is behind us, but think that sentiment and activity in the sector will remain weak for some time to come," said Jordan-Doak.
"Standard measures of policy uncertainty are still far higher now than in 2024 on average, for instance, so the shadow of higher tariffs on global trade remains present. What's more, barriers to trade will likely settle at higher levels than before Trump was elected. Those frictions will weigh on the manufacturing sector to a greater extent than services firms for instance."
