Make UK / PwC UK Senior Executive Survey reveals optimism amid mounting cost pressures

Britain’s manufacturers are backing the Government’s Industrial Strategy and sector-specific plans as the key to growth in 2026, according to a major new survey published today.

The Make UK 2026 Senior Executive Survey, delivered in partnership with PwC UK, captures the sector’s outlook for the year ahead – highlighting both renewed optimism and serious concerns. A majority of respondents believe opportunities will outweigh risks in 2025, with 57% identifying a long-term Industrial Strategy and sector plans as the most significant growth factor. Almost two-thirds (63%) say they are ready to accelerate investment on the back of it.

Despite facing a challenging economic climate, many firms remain committed to investing in the UK. However, Make UK has warned that soaring business costs – particularly employment and energy – are reaching a critical point. Without swift intervention, planned investments could be curtailed or diverted abroad.

The call to action is clear: Make UK is urging the Government to fast-track delivery of the Industrial Strategy, bring forward its long-promised energy support package, and offer greater stability around employment legislation and costs. Rising NICs and uncertainty over the Employment Reform Bill are cited as particular concerns for recruitment and workforce planning.

Stephen Phipson, Chief Executive of Make UK, said:

“Manufacturers have demonstrated their resilience over and over again in recent years, and those that remain innovative and are prepared to invest in new technologies, expanding markets and, most crucially, their people will continue to thrive.

But they can only do this if they are operating in the most favourable business environment. Despite the commitment to an industrial strategy, not only is growth anaemic, but the warning lights are now flashing red on the UK as a competitive place to manufacture and invest. The Government promised significant change – now is the time to deliver it.”

Cara Haffey, Leader of Industrials and Services at PwC UK, added:

“The UK’s manufacturers are ambitious in their mission to drive growth. The Industrial Strategy is front and centre of this optimism, but it will take time to reap the rewards of its implementation. Nonetheless, the industry can’t afford to stand still. Those focusing on product innovation, embracing new technologies and investing in marketing will lead the way in the race for growth.”

Innovation is at the heart of manufacturers’ investment strategies. Four in five companies are prioritising new product development, with 76% investing in digital technologies, AI, and automation. Over half (55%) plan to expand their product range, while 42% aim to enter new export markets. Meanwhile, 37% are focusing on stronger marketing, often tied to the rise of AI tools and automation.

But rising costs remain the single biggest threat to confidence. Eighty-six percent of manufacturers expect increased employment costs this year, with 79% anticipating higher material and input costs, and 67% foreseeing rises in business rates.

While some of these pressures stem from global factors, Make UK stresses that domestic policy decisions are fuelling uncertainty. Had further business tax increases been announced in the most recent Budget, 60% of companies said they would have scaled back or cancelled investment plans altogether, with 57% indicating they would have shifted investment overseas.

More than half of manufacturers (57%) still view the UK as a competitive base for production. However, 26% now say the UK is uncompetitive – a worrying shift in sentiment. And among non-UK investors, opinion is finely balanced: 41% consider the UK an attractive location, while 39% do not.

The message from industry is clear: with the right support and stability, the UK’s manufacturers are ready to lead – but rising costs and policy uncertainty risk undermining that ambition. As global competitors move quickly, the time for action is now.