Manufacturing output in the UK declined sharply in the quarter to June, continuing at a pace similar to that seen in the previous three months, according to the Confederation of British Industry’s (CBI) latest Industrial Trends Survey.
This downturn signals ongoing challenges for the manufacturing sector, which has been grappling with a combination of domestic and global economic headwinds.
As businesses and policymakers assess the implications, the data raises concerns about the broader health of the UK economy in the second half of the year.
UK factory orders slide
Factories across the UK have reported a sharper decline in orders for June 2025, according to the latest survey.
The CBI’s monthly Industrial Trends Survey, released on June 24, 2025, revealed that the balance of manufacturers reporting a drop in orders fell to -33 in June, down from -30 in May.
The survey found that both total and export order books remained weak, with balances largely unchanged from May and still below long-term averages.
Manufacturers also reported a slight fall in stock adequacy for finished goods, with the measure dipping below its historical norm.
Looking ahead, firms expect the pace of output decline to moderate in the coming three months through September.
Meanwhile, expectations for selling price inflation eased compared to May but continue to sit above the long-run average, suggesting persistent cost pressures in the sector.
Ben Jones, CBI Lead Economist, said:
The UK’s manufacturing sector is under significant pressure, contending with high energy costs, rising labour costs, pervasive skills shortages, and a volatile global economic environment.”
Long-term gain for the UK?
Jones added that the UK’s long-term economic vision is beginning to take shape, but urged the government to follow through with immediate action to support struggling manufacturers.
“Welcome progress has been made with the recent infrastructure and industrial strategies setting a clear long-term economic vision for the UK,” he said.
The economist further said that the anticipated trade agreement with the US should also reduce tariff-related uncertainty for key sectors such as automotive and aerospace.
The British Steel deal to supply hundreds of thousands of tonnes of rail track to Network Rail is also seen as a sign of progress.
“Businesses are ready to work in partnership to translate long-term ambitions into near-term investments, job creation and opportunities,” he added.
“With long-term strategies presented, the government must now continue to back up its ambitions with short-term delivery. This includes rolling out welcome energy cost interventions as soon as possible; delivering on Growth and Skills Levy flexibility; and pushing technology adoption to boost productivity.”
Disclaimer: Portions of this article were generated with the assistance of AI tools and reviewed by the Invezz editorial team for accuracy and adherence to our standards.
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