East Midlands manufacturers have seen a poor early summer following the ongoing weaknesses in the UK economy. This has been compounded by global economic turmoil caused by the imposition of tariffs according to a major survey published by Make UK and business advisory firm BDO.
The second quarter Manufacturing Outlook survey showed that output in the region was flat at a balance of +0% which is low by historical standards, total orders also turned negative at a balance of -5%.
This poor performance in output has translated into weaker job prospects with recruitment intentions also turning negative (-5%). Meanwhile investment also showed no sign of growth at +0% as companies paused their plans in response to economic uncertainty.
Additionally, the survey has also shown that manufacturers’ opinion of the United States as a positive growth market for exports has fallen sharply, with the US slipping out of the top three global regions for the first time. The US has dropped to fourth place for UK manufacturers as preference is shown to Asia/Oceania and the Middle East as companies respond to tariffs and increased uncertainty.
A survey on the impact of tariffs conducted by Make UK also shows that six in ten companies expect their export volumes to the US to be hit, while a similar number (63%) expect their business to be negatively impacted by tariffs.
Furthermore, almost a third (30%) of companies are assessing changes to their supply chains in terms of where they source from, while more than a quarter (28%) are now seeking new markets. Just 4% of companies said they would now invest in manufacturing in the US.
The survey also reveals worsening prospects for manufacturers looking forward, with the manufacturing growth forecast for 2026 being slashed from a previous +1% to -0.5%. Meanwhile the growth forecast is expected to be negative this year (-0.2%) off the back of a flat year in 2024, this presents a worrying trend of decline.
Chris Corkan, Midlands Region Director of Make UK, said: “There is no sugar coating the fact that these are very challenging times for manufacturers in the East Midlands who are facing a potent mix of headwinds at home and overseas. It’s now vital that the upcoming Industrial Strategy is bold and ambitious in order to provide companies with some light at the end of the tunnel.”
Paul Fenner, Head of Manufacturing at BDO in the Midlands, added: “This quarter’s results demonstrate the increasingly challenging landscape manufacturers in the East Midlands are operating in.
“While last month’s trade deals should begin to remove barriers as UK companies seek new trading partners and opportunities for growth, there remains a myriad of challenges for the region – not least the urgent need for skilled workers.
“The sector’s overall forecasted decline in growth is concerning, what these businesses now need is targeted support and investment from the upcoming Industrial Strategy.”
