UK Manufacturing Crisis: 25% of Firms Moving Production Overseas, June 16

Britain’s manufacturing sector faces collapse as energy prices force thousands of companies toward bankruptcy or relocation. A Make UK survey found that 25% of manufacturers have already moved production overseas or plan to do so, while one in 10 expect insolvency within 12 months. The crisis threatens 2.5 million jobs and requires urgent government action on electricity and gas costs.

Energy Costs Driving Manufacturers Abroad

UK electricity and gas prices are the highest in the G7, costing manufacturers twice as much as continental Europe and four times more than the US. Make UK’s survey found that 9% of companies have already moved production overseas, with another 16% actively considering it. The Middle East conflict has worsened the situation, with 46% of manufacturers reporting further energy bill increases since the conflict began.

Profit Margins Collapse Despite Price Rises

Almost all manufacturers (98%) expect significant profit squeezes over the next quarter, even after raising prices. Six in 10 companies passed energy cost increases to customers, but this failed to offset rising bills. More than a quarter of surveyed firms have less than 12 months of cash remaining, threatening immediate solvency.

Job Losses and Investment Freezes Mount

In response to margin pressure, 38% of companies have delayed investment and 21% have cut headcount. Make UK CEO Stephen Phipson warned that Britain faces deindustrialisation unless manufacturers receive urgent relief. The survey covers 130,000 UK manufacturers, of which only 800 are large foreign-owned firms.

Government Scheme Too Narrow to Help

The British Industrial Competitiveness Scheme (BICS) currently covers only 10,000 manufacturers and cuts electricity bills by up to 25% from April 2027. Make UK and the Trades Union Congress are calling for expansion to all 130,000 manufacturers, which would cost £3 billion. Political delays risk accelerating the industrial exodus.

Final Thoughts

UK manufacturers face a critical choice: relocate or collapse. Without immediate energy cost relief, Britain risks losing its industrial base within months, threatening 2.5 million jobs and long-term economic competitiveness.

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