Long term industrial strategy set to bring immediate benefits to UK
Aaron Blutstein 21 October 2025 
Every year, Make UK does a survey on investment trends in manufacturing. The results of the 2025 survey are especially noteworthy as it shows the announcement of a long term industrial strategy is set to bring immediate benefits to the UK economy, with more than a third of manufacturers saying they will now accelerate investment projects as a direct response.
In addition, the positive commitments the Government has made in the Advanced Manufacturing Plan are highlighted by the fact that three quarters of companies believe they will benefit directly from it.
The figures will provide a timely boost in the run up to the Budget as investment intensity (investment as a % of turnover) has dropped sharply in the last year in response to domestic and overseas uncertainty and is now the lowest since the immediate aftermath of the EU referendum at 6.8%. This is down significantly from last year when it reached a ten-year high of 8.1%. R&D intensity has also fallen slightly to 6.2% from 6.5% last year.
As a result, in the run up to the forthcoming Budget, Make UK will be urging the Government to not just safeguard vital investment incentives which the survey shows are key drivers of manufacturers’ investment decisions but, extend them further. According to the survey, almost four in ten companies (37%) make their investment decisions based on the availability of tax reliefs. Furthermore, Make UK is also urging the Government to set in stone the business tax relief policy for the remainder of this Parliament given almost a third of companies (31.8%) say frequent changes to tax relief policy are acting as a barrier to investment.
As well as analysing the impact of Government policy, the survey also provides a comprehensive view of investment trends across UK manufacturing.
The announcement of an industrial strategy being specifically used to drive investment in decarbonisation by more than 4 in 10 companies (43.%). Investment in data analytics and AI (35.4%) and increased manufacturing capacity (34.2%) are a priority for around a third of companies.
Skills has overtaken plant and machinery as the leading investment priority in the next twelve months (47.6% and 44.1% respectively). Amid the ongoing debate about the investment performance of UK industry compared to international competitors, almost two thirds of companies (68%) invest up to 10% of their turnover in plant and machinery, with a further fifth (18%) investing between 10% and 50%. Furthermore, more than two thirds of companies (68%) invest up to 10% of turnover in R&D, while almost one in five (18%) invest between 10% and 50%.
Despite the overall encouraging picture, it’s clear that manufacturing investment is at a critical juncture. It’s therefore essential that the Government does all it can to focus on growth and investment as a matter of urgency.
