UK manufacturers have reported the sharpest loss of confidence since the start of the COVID-19 pandemic in the Make UK survey.
- Confidence Drop: British manufacturers' confidence fell sharply to 5.8 in Q4 2024 (from 6.8 in Q3), the steepest decline since the COVID-19 pandemic.
- Manufacturing Forecast:
- 2024: Manufacturing output expected to shrink by 0.2% (previously forecasted +0.5%).
- 2025: Growth is forecast at 0.7%, slower than broader economic growth.
- Sector Conditions:
- Output and orders remain positive.
- Recruitment and investment intentions are stable.
- Confidence among manufacturers has significantly worsened compared to the previous quarter.
- Cost Pressures:
- Rising costs, including a £25 billion employer social security hike and a nearly 7% minimum wage increase (effective April 2025), are intensifying pressure on businesses.
- Economic Context:
- UK's GDP contracted in September and October 2024, the first consecutive monthly declines since 2020.
- Broader surveys indicate weakening hiring intentions following the budget.
