UK Manufacturers Signal Weakest Investment Plans Since 2023

Manufacturing companies across the UK are bracing for a year of reduced investment, with the latest industry data revealing the weakest spending intentions since mid-2023. The figures show manufacturers expect to cut back on buildings, plant and machinery, training programmes and innovation projects over the next 12 months.

The Scale of the Pullback

The Confederation of British Industry’s quarterly Industrial Trends Survey recorded an investment intentions balance of -22% for the coming year. This represents a sharp decline from previous quarters and signals widespread caution across the manufacturing sector.

Meanwhile, the survey, which polls manufacturers regularly about their spending plans, captures sentiment at a time when the sector faces multiple headwinds. UK manufacturing output fell by 0.7% in the fourth quarter of 2025, according to Office for National Statistics data, while the PMI Manufacturing Index stood at 45.6 in March 2026 – indicating continued contraction.

Behind the Hesitation

Manufacturers cite weak demand and elevated input costs as primary drivers of their cautious approach. The data suggests companies are responding to economic uncertainty by preserving cash rather than investing in expansion or modernisation.

Training and retraining budgets appear especially vulnerable. These cuts could have lasting effects on workforce skills development at a time when the sector needs to adapt to new technologies and market conditions.

Product and process innovation spending is also expected to decline. This reduction comes despite government efforts to encourage business investment through measures like full expensing for capital allowances.

Policy Response

The Department for Business and Trade maintains its commitment to supporting manufacturing through tax reliefs and trade agreements. Officials view the survey results as reflecting short-term caution rather than fundamental sector weakness.

Opposition parties have criticised the government’s economic policies, arguing for accelerated investment in green manufacturing initiatives. Labour representatives blame sluggish growth on previous fiscal decisions and call for more targeted support.

Key Takeaways

• Manufacturing investment intentions have hit their weakest level since mid-2023 at -22%
• Companies plan cuts across buildings, machinery, training and innovation spending
• UK manufacturing output declined 0.7% in Q4 2025 amid broader sector challenges

What This Means for Kent Residents

Kent’s manufacturing heartland, especially in areas like Dartford and Sheppey where automotive and chemical companies operate, could see reduced local investment affecting employment prospects. Workers in these sectors should monitor Jobcentre Plus for potential retraining schemes as companies cut their own training budgets. Local businesses may also find fewer opportunities for suppliers and contractors as manufacturers tighten spending across all categories.