Trump tariffs continue to cause manufacturing sector concern, according to Lancashire adviser
The UK manufacturing sector is unlikely to see significant growth until the current economic headwinds pass, according to a leading Lancashire-based advisor.
Ginni Cooper is manufacturing partner at accountancy and business advisory firm MHA, the UK independent member firm of Baker Tilly International. She is based at MHA’s Preston office and provides a range of accountancy, audit and business advisory services to manufacturing and engineering companies across the region.
She was speaking after the release of the S&P Global UK Manufacturing PMI (purchasing manager’s index) data for March 2025.
The index was 44.9, its lowest recording since late 2023. Ginni said while this was not as bad as many had feared, the results reflected the sector’s uncertainty due to global economic factors.
“The Chancellor’s Spring Statement last week did little to allay the concerns of the UK’s manufacturers,” she said. “With business confidence in decline and increasing headwinds from across the Atlantic in the form of trade tariffs, it is difficult to see where significant sector growth is going to come from.
“However, there are some rays of positivity for the sector on the horizon. The government’s commitment to increase defence spending in the Spring Statement will undoubtedly have a positive impact across related supply chains and help bolster investment in technology and skills.”
Ginni also pointed to the government’s upcoming planned Industrial Strategy, which is expected to be released in the coming weeks.
“This will hopefully set a robust and clear road map for getting the manufacturing sector back on track,” she said.
“While our clients are feeling positive about the strategy, they are also acutely aware of how quickly the business environment is changing – primarily down to the US administration’s tariff announcements. A concern is that, as soon as the document is released, it may well be out of date. Only last week, the US landed a 25 per cent tariff on automotive imports.
“With the US being the largest market for many UK-based OEMs, this will have a significant impact across the whole supply chain, unless a deal can be brokered with the UK government.”
According to Ginni, improving technology and the deployment of AI was likely to be the next step for many manufacturers looking to grow. However, currently, some companies simply do not have the capital available to invest in these areas.
“Faced with shrinking order books and the impending rise in National Insurance contributions and minimum wage increases, reserves of investment capital, on new technology for example, will become significantly depleted,” she added.
“For business growth, across all sectors, stability is key. But unfortunately, at the moment, the business environment is far from stable.”