Make UK/PwC UK Senior Executive Survey – Industrial Strategy set to provide manufacturing growth boost in 2026

Make UK and PwC UK’s annual Executive Survey explores the key issues facing UK manufacturers in 2026.

Make UK/PwC UK

12 January 2026

But warning lights flashing red in response to cost increases

Majority of manufacturers believe opportunities will outweigh risks in 2025
Industrial Strategy to have biggest impact on manufacturing growth
But almost nine in ten companies expect their employment costs to increase
And warning signals for UK as a place to manufacture and invest
New products, markets and digital technologies focus of new investment

Britain’s manufacturers believe the introduction of an Industrial Strategy and individual sector plans will have the biggest impact on their growth prospects in 2026, with a majority of companies believing the opportunities for their business to succeed outweigh the risks this year according to a major survey published today.The findings come from the annual Make UK 2026 Senior Executive survey, in association with PwC UK, which looks at the opportunities, risks and challenges for manufacturers in the year ahead, as well as the outlook for the UK and international economies.Access the full report hereAs well as the benefits from an industrial strategy and sector plans the survey shows that, despite the current challenges from rapidly escalating costs, a majority of companies believe that overall, the UK remains a competitive place in which to manufacture.However, Make UK warned the survey also signals that the significant increases in business cost that manufacturers are facing, especially on employment and energy, are threatening to reach a tipping point whereby investment plans will be cancelled or shifted overseas.In response, Make UK is urging Government to speed up the pace of delivery on industrial strategy, as well as bringing forward the much vaunted business energy support scheme and expanding it to cover the broadest possible range of companies. In addition, Make UK is calling for greater stability and clarity regarding future employment legislation and costs given the impact on recruitment of the increase in NICs and Employment Reform Bill.

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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 and, 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 from its implementation. Nonetheless, the industry can’t afford to sit still. Those shifting their focus to product innovation, embracing technology and investing in marketing will be the winners in the battle for growth.”According to the survey, more than half of companies (57%) say a long term industrial strategy and sector plans will have the biggest impact on growth this year, with almost two thirds (63%) saying they will bring forward investment in response.The top priorities for investment are new product development for 4 in 5 companies, with more than three quarters (76%) investing in digital technologies, AI and automation. More than half of companies (55%) are set to expand their product portfolio and 4 in 10 companies (42%) planning to export to new countries. The increased use of AI in particular is linked to more than a third of companies (37%) saying their key area for growth is increased marketing of their business.The biggest challenges companies face are significant cost increases across the board with almost 9 in 10 companies (86%) expecting increases in employment costs, a similar number (79%) seeing increases in material/input costs and two thirds (67%) business rates.In response, Make UK warned that while some increases are a result of global factors, domestic employment and, other business costs, are threatening a tipping point whereby investment plans will either be cancelled or shifted overseas. As an indication of sentiment within the sector, almost two thirds of companies (60%) said they would have decreased or cancelled investment plans if business tax increases had taken place in the Budget, with a similar number (57%) they would have shifted investment overseas.Furthermore, while more than half of companies (57%) believe the UK to be a competitive place to manufacture, more than a quarter (26%) view the UK as uncompetitive. In addition, an equal number of non-UK businesses view the UK as an unattractive location to invest (39%) compared to those who view it as an attractive destination (41%)._{The survey of 174 senior Executives was carried out between 27 October and 20 November 2025.}

About Make UK

Make UK, The Manufacturers’ Organisation, is the representative voice of UK manufacturing, Collectively we represent 20,000 companies of all sizes, from start-ups to multinationals, across engineering, manufacturing, technology and the wider industrial sector. Everything we do – from providing essential business support and training to championing manufacturing industry in the UK and the EU – is designed to help British manufacturers compete, innovate and grow.From HR and employment law, health and safety to environmental and productivity improvement, our advice, expertise and influence enables businesses to remain safe, compliant and future-focused.

About PwC UK

At PwC UK, our purpose is to build trust in society and solve important problems. We’re a network of firms in 151 countries with over 364,000 people who are committed to delivering quality in assurance, advisory and tax services. Find out more and tell us what matters to you by visiting us at www.pwc.com. PwC UK refers to the PwC UK network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details.

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