Manufacturing Outlook Report for Q3 2024

According to the latest Manufacturing Outlook report for Q3 2024 by Make UK and BDO, companies are optimistic about the overall economic outlook due to increased political stability, with nearly 60% predicting better growth over the next year. Conversely, only 6% of businesses anticipate a decline in GDP this year under the new Government.

The report also highlights that output has turned negative for the first time in four years but is expected to rise by a third in the next quarter, with a similar trend in recruitment. Currently, export orders are surpassing domestic ones, though this is expected to shift in Q4.

Despite these mixed results, business confidence has continued to rise, matching the highest levels recorded since the survey began in 2014.

Ahead of the Autumn Statement and Spending Review at the end of October, Make UK urges the Government to sustain momentum by detailing the long-awaited industrial strategy, including the structure and governance of the Industrial Strategy Council, and to commit to removing unnecessary growth barriers, such as:

• Advancing the UK CBAM (Carbon Border Adjustment Mechanism) to 2026.
• Reviewing and increasing apprenticeship funding bands.
• Committing to more long-term, large-scale infrastructure projects to make the UK more attractive for investment.

This quarter presents a mixed picture with negative output and a dip in recruitment, yet positive investment and rising business confidence. With the Autumn Budget and Spending Review approaching, it is crucial for the Government to accelerate and fulfil pre-election promises, particularly the publication of a robust long-term Industrial Strategy.

The report highlights several areas where technology plays a crucial role in the manufacturing sector’s performance and outlook:

Overall, technology is a key driver in the manufacturing sector’s ability to adapt, grow, and remain competitive in a rapidly changing economic landscape. The report underscores the need for continued investment in technology and skills development to harness these benefits fully.

Fhaheen Khan, Senior Economist, Make UK, notes that manufacturers are hopeful that greater political stability will lead to a better economic outlook, boosting business confidence. Whether this confidence will translate into improved output and orders next quarter remains to be seen, but there is a growing sense of optimism. Download the report below.