UK Business Confidence Hits 2-Year Low
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Business sentiment in the UK’s manufacturing sector has taken a significant hit, plunging to its lowest level in over two years, according to the latest report from the Confederation of British Industry (CBI).
The sector’s morale dropped sharply to -47 in January 2025, a stark decline driven by decreased manufacturing output and a significant slump in new orders, particularly for exports.
In fact, the drop in export orders was the steepest the sector has seen since 2020, exacerbating the sector’s struggles.
Looking ahead, manufacturers are bracing for further deterioration, with many projecting that the decline in business activity will intensify in the coming months.
Along with this, cost pressures have been mounting, and manufacturers are expecting inflation to rise significantly across both domestic and export prices.
The weak demand outlook has also affected investment intentions, with manufacturers scaling back spending in virtually all categories due to uncertainty about future orders, poor profit margins, and limited access to internal financing.
The employment landscape within the sector is also facing challenges, with companies anticipating a decline in hiring at the fastest pace since mid-2020.
Manufacturers are concerned that this negative sentiment could spiral further, becoming a self-fulfilling prophecy.
To counter this, many have called for stronger government intervention, urging clearer and more supportive policies to help revive the sector and restore confidence.
Data: Trading Economics
