State of industry report Q3 2024

Industry’s business confidence remained steady at -6% in Q3, an indication of broadly unchanged conditions in Q3 compared to Q2.
Uncertainty over upcoming regulation (53%) is the leading factor constraining investment, while uncertainty about demand (44%) remaining a top concern.
Manufacturers continue to primarily focus on growing UK sales (59%) and new product development (59%). The number of businesses considering digital transformation has doubled in Q3.
80% of manufacturers plan to maintain or increase investment over the coming year. By category, 44% of manufacturers plan to increase their spend on skills, 53% to spend more on plans and machinery and 40% plan to increase their R&D spend over the following 12 months.
A post-budget survey revealed that 71% of respondents thought that the increase in the employer National Insurance Contributions will have a negative impact on pay. Plans to invest £300m for further education and £40m for the Growth and Skills Levy is welcomed, with 52% believing it will have a positive impact on their businesses.
Labour shortages in the sector were broadly unchanged in Q3, with vacancy rates at 5.1%, a slight uptick from 4.9% in Q2. Skills shortages continue to impact different roles and levels, from engineers and managers to factory operatives.
Manufacturers expect costs to rise by 2.9% over the year to September 2025, as inflationary pressures are gathering pace.