Yorkshire & Humber manufacturers have seen a poor early summer following the ongoing weaknesses in the UK economy. This has been compounded by global economic turmoil caused by the imposition of tariffs, especially on the steel industry according to a major survey published by Make UK and business advisory firm BDO.
The second quarter Manufacturing Outlook survey showed that output in the region was very weak at a balance of -33%, which is low by historical standards. Total orders were also significantly down at -56%.
This poor performance in output has translated into weaker job prospects with recruitment intentions turning negative (-22%). Meanwhile investment was similarly low (-33%) as companies paused their plans in response to the economic uncertainty.
Additionally, the survey has also shown that manufacturers’ opinion of the United States as a positive growth market for exports has fallen sharply, with the US slipping out of the top three global regions for the first time.
The US has dropped to fourth place for UK manufacturers as preference is shown to Asia/Oceania and the Middle East as companies respond to tariffs and increased uncertainty.
A survey on the impact of tariffs conducted by Make UK also shows that six in ten companies expect their export volumes to the US to be hit, while a similar number (63%) expect their business to be negatively impacted by tariffs.
Furthermore, almost a third (30%) of companies are assessing changes to their supply chains in terms of where they source from, while more than a quarter (28%) are now seeking new markets. Just 4% of companies said they would now invest in manufacturing in the US.
The survey also reveals worsening prospects for manufacturers looking forward, with the manufacturing growth forecast for 2026 being slashed from a previous +1% to -0.5%. Meanwhile the growth forecast is expected to be negative this year (-0.2%) off the back of a flat year in 2024; this presents a worrying trend of decline.
Dawn Huntrod, region director of Make UK in the North, said: “There is no sugar coating the fact that these are very challenging times for manufacturers in Yorkshire & the Humber who are facing a potent mix of headwinds at home and overseas. It’s now vital that the upcoming Industrial Strategy is bold and ambitious in order to provide companies with some light at the end of the tunnel.”
Steve Talbot, head of manufacturing at BDO in Yorkshire, added: “This quarter’s results demonstrate the increasingly challenging landscape manufacturers across Yorkshire are operating in. While last month’s trade deals should begin to remove barriers as UK companies seek new trading partners and opportunities for growth, there remains a myriad of challenges for the region.
“The sector’s overall forecasted decline in growth is concerning, what these businesses now need is targeted investment and support from the upcoming Industrial Strategy.”
