UK Manufacturing Slows – But Some Sectors Are Quietly Outperforming

UK Manufacturing Slows – But Some Sectors Are Quietly Outperforming 

The latest figures from Make UK and BDO warn that UK manufacturing has “hit the buffers,” with falling output, stalling investment, and declining confidence across much of the sector. But beneath the headlines lies a more nuanced picture, showing not every industry is faltering. 

Plimsoll’s latest industry data shows that while some manufacturing segments are under severe pressure, others are displaying resilience, profitability, and even growth. In fact, several standout sectors are defying the broader slowdown and presenting opportunities for investors, acquirers, and operators. 

Here’s where the manufacturing bright spots are emerging. 

 

Electronic Equipment Manufacturing: Profits Holding Firm in a High-Tech Race 

Despite broader economic pressure, Electronic Equipment Manufacturers are performing steadily. According to Plimsoll’s latest data: 

• 47% of companies in the sector are rated as having “Strong” or “Good” financial health. 

• Average profit margins remain at 5.8%, showing relative stability despite rising input costs. 

• The average sales growth across the sector sits at 7.4%, underpinned by ongoing demand for automation, smart systems, and digital infrastructure. 

The top performers are growing rapidly, with over 150 companies increasing sales by more than 10% year-on-year. While not immune to cost pressures, the sector’s ability to innovate and tap into high-growth markets is keeping it ahead of the curve. 

 

Food Manufacturing: Resilient Revenues and Strategic Consolidation 

In a volatile economic climate, Food Manufacturing remains a consistent performer. Plimsoll’s sector analysis reveals: 

• The average sales growth is 6.2%, supported by stable demand and essential supply chains. 

• Over 200 companies have improved their financial health rating in the past year, indicating stronger balance sheets and better cash management. 

• 45% of companies are rated as Strong, and only 14% are flagged as in Danger, a lower risk rate compared to other manufacturing sectors. 

Despite input cost inflation, businesses are adjusting through pricing strategies and operational efficiencies. Notably, M&A activity is rising. Plimsoll reports 96 acquisition targets in the market, as stronger players absorb smaller or less resilient operators. 

 

Chemical Manufacturing: Specialty Niches Driving Profitability 

While bulk chemical producers are feeling margin pressure, specialty Chemical Manufacturing continues to perform well. Plimsoll data highlights: 

• 31% of companies are rated Strong, and average pre-tax profit margins are holding at 7.1%, one of the highest across all manufacturing sectors. 

• Sales growth stands at 6.8%, driven by demand in pharmaceuticals, coatings, and advanced materials. 

• More than 50 companies in the sector have grown profits by over 25% in the last 12 months. 

These figures reflect the strategic advantage of niche positioning; firms producing value-added, customised chemical products are weathering economic turbulence more successfully than commodity players. 

 

Conclusion: Sector Divergence is the New Normal 

Yes, UK manufacturing is under pressure, but the story is not one of uniform decline. Electronics, food, and chemicals are proving that smart positioning, financial discipline, and innovation can still deliver strong returns in a difficult market. For acquirers, investors, and strategic planners, Plimsoll’s data makes one thing clear: the opportunities are still there, if you know where to look. 

In a sector facing disruption and consolidation, those who act on solid financial insights will be best placed to shape the next chapter of UK manufacturing. 
Learn more about your industry by visiting www.plimsoll.co.uk.