Britain's manufacturers are optimistic about improved economic prospects despite a lack of immediate impact from the recent government change, according to the latest Q3 Manufacturing Outlook survey by Make UK and BDO.

While growth remains sluggish, 58% of firms expect better economic performance in the next 12 months, with Make UK upgrading its 2025 economic growth forecast from 0.8% to 1.8%.

Challenges such as declining output and recruitment dips remain, but investment and business confidence are on the rise, with manufacturers calling for long-term industrial strategies to sustain growth.

The sector is pushing for policy improvements, including an early introduction of the UK’s Carbon Border Adjustment Mechanism (CBAM) and increased funding for apprenticeships.

Fhaheen Khan, Senior Economist at Make UK, said: “This quarter presents a tale of two halves with output turning negative and recruitment taking a dip, yet investment remains positive and business confidence continues to climb.

"With an Autumn Budget and Spending Review fast approaching, now is the time for Government to pick up the pace and deliver on pre-election promises, most notably the publication of a long-term robust Industrial Strategy."

Despite weaker domestic orders, exports performed well in the third quarter, driven by demand from the EU, and confidence remains high for the next quarter. Manufacturers are hopeful that the current political stability will lead to stronger performance, with the government urged to deliver on promises to enhance competitiveness and long-term growth strategies.

With the Autumn Budget approaching, the industry is looking to policymakers to remove barriers to growth and support key infrastructure projects. As economic confidence climbs, manufacturers are gearing up for better performance, with recruitment expected to recover as firms prepare for increased demand.

“Manufacturers are hopeful that a period of greater political stability will provide a better economic outlook ahead, and that in turn is boosting business confidence," said Richard Austin, Head of Manufacturing at BDO.

"Time will tell if that confidence can translate to improved output and orders next quarter, but there’s a growing sense of hope that a rising tide can lift all boats."