UK manufacturers on strong footing for 2025, report shows

UK manufacturers are riding high on a wave of newfound confidence for 2025, as figures reveal a dramatic uplift in sales revenue and purchasing.

Small and mid-sized firms saw their average sales revenue jump 88% in 2024, while the number of purchase orders (POs) placed with suppliers was also up 88%, according to a report from inventory management software provider Unleashed.

Personal care manufacturers recorded the biggest jump in sales revenue at 137%, followed by food at 133%. Electronics and telecommunications firms saw the biggest increase in POs at 164%, followed by fashion manufacturers at 123%.

The report also shows manufacturers are buying more inventory in anticipation of further orders.

Thomas Laird, owner and MD of Salt of the Earth Natural Deodorants, said: “We’re seeing a strong return in confidence within our sector. Black Friday has been a significant driver for this, with robust sales reinforcing optimism. Apart from seasonal surges, we’ve also observed international sales playing a pivotal role in driving confidence.

“There’s a palpable demand for natural and sustainable products globally, and it’s been exciting to see that reflected in our growth. Overall, we haven’t seen a dip – in fact, it’s been quite the opposite. The natural deodorant market continues to experience steady growth as consumers prioritise sustainable and effective personal care solutions.”

Joe Llewellyn, GM of Cloud ERP at The Access Group, the parent company of Unleashed, said: “This uptick in sales revenue and purchasing bodes well for the manufacturing industry.

“Firms are buying more inventory – and while this might bring back bad memories of post-Covid disruption, when manufacturers were forced to adopt a ‘just in case’ strategy – it’s actually a positive sign in the current climate.

“Lead times remain low, so the orders we currently see flowing through the supply chain look like genuinely robust business confidence.”

“It will also be interesting to see what impact the recent Autumn Budget will have on the wider manufacturing industry. On the one hand, business leaders have warned that rises in National Insurance, minimum wages and business rates will hit them hard. However, the government has pledged to invest in housing, public infrastructure, clean energy and technology, which could provide a welcome boost to manufacturers in the construction, energy and electronics sectors.”

Sector breakdown:

• Sales revenue was up across every sector, with personal care topping the table at 137%, followed by food at 133%. Only electronics and telecommunications saw a drop (19%) – however the overall trend in this sector was still positive, with the rolling 12-month average of sales up slightly, at 1.4% and QoQ purchase orders increasing more than any other sector (up 164%).

• All sectors, apart from sport, recreation and entertainment, saw an uplift in purchasing.

• Almost all manufacturing sectors saw a drop in profitability, as businesses invested in inventory they’ve yet to sell. Furnishings at homewares saw the most dramatic fall (down 71%). However, health and medical supplies, and sports, entertainment and recreation bucked the trend with uplifts of 17% and 14% respectively.

• Lead times remain low, with the food industry seeing a minor lift up from 15 days to 18, and  personal care up from 17 days to 20.

Phil Peters, head of supply chain services at consultancy YF, said: “We’ve definitely seen more positivity in the last few months across many of the manufacturers we work with, driven by brands who are feeling (cautiously) optimistic and reflecting this in more confident purchasing strategies as they prepare for rising consumer demand.

“Obviously much of this is down to increased consumer spending as inflation stabilises – particularly in food and personal care – but there are also a number of categories where we are seeing significant growth as brands focus on sustainability and health innovation to align with consumer priorities. Equally, the supply chain challenges of the last few years are really starting to stabilise, so brands are feeling more secure about meeting demand without overextending resources.”

Gareth Johnston, operations director of engineering company BGB, said: “The wind energy sector is seeing a notable resurgence of confidence; mirroring the broader optimism returning to UK manufacturing. Including supportive government policies, increased public and private sector investment, and rapid advancements in technology, this renewed momentum is being driven by several key factors.

“These innovations are significantly enhancing the efficiency and competitiveness of renewable energy sources within the UK, while climate targets and a heightened focus on energy security are creating a sustained demand for wind energy, fueling growth across the market.”

Sales revenue – Q2 2024 – Q3 2024

Purchase orders – Q2 2024 – Q3 2024

Profitability (Gross Margin Return on Inventory) – Q2 2024 – Q3 2024

Lead times – Q2 2024 – Q3 2024

View the full Unleashed Manufacturing Health Index report.

13/01/2025