A recent report by inventory management platform Unleashed, part of The Access Group has revealed a surprising surge in sales for UK manufacturers, challenging the prevailing sentiment of cautious business expectations amidst economic uncertainty.
The figures, derived from over 600 small-to-medium enterprises (SMEs) using Unleashed’s inventory management software, show a remarkable 30% increase in sales revenue for the first quarter of 2025 compared to Q4 2024, and a 13% year-over-year growth. Despite a backdrop of weak business confidence in the UK, these results suggest that the manufacturing sector may be bucking the broader economic trends.
Resilience Amidst Rising Uncertainty
Business confidence in the UK has taken a hit, as recent surveys show a negative shift for the first time since 2022. Factors such as rising taxes, inflation, and global market instability have weighed heavily on economic outlooks. However, UK manufacturers have displayed remarkable resilience, with many reporting not just increased sales, but also improved profitability. According to Joe Llewellyn, General Manager of ERP Small Business at The Access Group, these strong results reflect the benefit of falling bank rates and shifting international trade dynamics. “We’ve heard from some of our customers that tariff-impacted international clients are turning to UK manufacturers for solutions, creating opportunities for growth despite global disruptions,” he noted.
The report highlights how UK manufacturers have capitalized on several factors, including the strategic delay in stock purchases to maintain profitability. The Gross Margin Return on Inventory (GMROI) increased by 10% from Q4 2024, reaching £4.03 for every pound spent on inventory, its highest point in two years. These efficiencies were supported by reduced lead times, which have dropped to an average of 15 days, allowing businesses to reorder smaller quantities at more favorable terms.
Sector-Wide Trends and Category Variations
Among the 12 manufacturing categories surveyed, nearly all experienced quarter-on-quarter sales growth. However, certain sectors saw greater volatility. The electronics and telecommunications industries, for instance, faced a 23% drop in sales revenue compared to the previous quarter, while the food sector experienced a sharp 34% decline. By contrast, sectors such as building and construction, clothing, and fashion saw impressive sales increases—130% and 68%, respectively, compared to the previous quarter.
The reduction in lead times across sectors has been a significant driver of this positive performance. Notably, sports and entertainment manufacturers reported a staggering 45% reduction in delivery times, from 22 days in Q4 2024 to just 12 days in Q1 2025. Meanwhile, industrial machinery manufacturers were particularly effective in managing excess stock, with a dramatic 68% reduction in unsold inventory, indicating improved supply chain efficiency.
A Pivotal Moment for UK Manufacturing
As UK manufacturers continue to adapt to evolving market conditions, it’s clear that those who have leveraged efficient stock management, adaptive pricing strategies, and international demand shifts are poised for success. The favorable trend in lead times and exchange rates, coupled with growing demand from overseas, places the UK manufacturing sector in a potentially strong position moving forward. However, as global uncertainty persists, businesses will need to remain vigilant, carefully balancing investment in growth with risk management.
