Our new Manufacturing Report 2026 highlights resilience, investment and regional opportunity. The report draws on a survey of 1,000 businesses and C-suite executives across the UK and Ireland manufacturing and engineering sector, combining those findings with insight from MHA’s national manufacturing specialists and external economic contributors. Prepared against a backdrop of continued global instability, weak economic growth, international trade barriers and inflationary pressure, it provides a benchmark of sector sentiment, investment intentions and operational challenges across regions and company sizes.
Manufacturers across Milton Keynes, Northamptonshire and the wider South East Midlands have become accustomed to operating in uncertain conditions. Over the last decade they have navigated Brexit, a global pandemic, supply chain disruption, inflationary pressures and geopolitical instability. Yet the MHA Manufacturing Report 2026 suggests that while the challenges facing the sector continue to evolve, confidence in future growth remains remarkably strong.
The South East Midlands is home to one of the UK’s most important manufacturing and logistics corridors. With world-class transport links, a growing advanced engineering base, strong automotive supply chains and a concentration of innovative industrial businesses, the region is well positioned to continue driving economic growth. However, the report makes clear that manufacturers cannot afford to be complacent. The operating environment remains complex, and resilience has become just as important as productivity or profitability.
Recent indicators show that manufacturing output continues to grow nationally, but at a slower pace. June’s PMI data suggests momentum is becoming more fragile, with new order growth falling to a six-month low. Much of the recent increase in activity appears to have been driven by customers bringing forward purchases ahead of anticipated price rises and potential disruption caused by ongoing international conflicts. The critical question for many manufacturers is whether current order books reflect sustainable demand or simply short-term market behaviour.
At the same time, higher borrowing costs are continuing to influence investment decisions. Financing expansion, purchasing new equipment and managing working capital remain significantly more expensive than during the period of ultra-low interest rates. For many manufacturers, this means a balancing act between protecting cash reserves and maintaining competitiveness through investment.
Inflationary pressures have also proved more persistent than many businesses had hoped. While headline inflation has moderated, cost pressures remain firmly embedded across energy, transport, imported materials and labour. Manufacturers are also preparing for additional pressures arising from evolving trade policies, carbon regulation and wider geopolitical developments.
The result is a business landscape where change has become the norm rather than the exception.
Growth expectations remain strong
Despite these challenges, the overwhelming message from the report is one of optimism. Across the UK and Ireland, 81% of manufacturers expect growth of more than 3% during the next 12 months, while 26% anticipate growth of between 6% and 10%.
Confidence is equally evident across the Midlands. In the Milton Keynes and Northampton areas, 58% of manufacturers expect growth between 3% and 5%, with a further 20% forecasting growth of 6% to 10%, demonstrating that businesses continue to see significant opportunity despite economic uncertainty.
Manufacturers recognise that maintaining competitiveness requires ongoing investment, even during periods of economic volatility. The report finds that businesses are focusing on productivity improvements and operational resilience rather than retrenching or delaying growth plans.
Nationally, supply chain disruption has emerged as the single biggest operational concern, cited by 35% of businesses.
Cybersecurity follows closely at 34%, while energy costs, skills shortages and rapid technological evolution continue to place pressure on management teams.
For manufacturers across Milton Keynes and Northampton, supply chain resilience remains particularly important. The report found that 35% of manufacturers in the region identified supply chain disruption as one of their top three challenges. Th is reflects the area’s extensive integration into national and international supply networks, particularly across engineering, automotive and advanced manufacturing sectors.
Skills shortages continue to be another significant concern. Local manufacturers are competing for talent within a highly competitive employment market, while simultaneously responding to increasingly rapid technological change.
Investment remains the preferred response
Rather than retreating in response to these pressures, manufacturers are actively investing in long-term resilience. Across the industry, 41% of businesses are investing in technology and AI, 40% are strengthening IT systems and cyber defences, 37% are diversifying supply chains, and 35% are focused on upskilling existing employees.
These investments demonstrate a sector looking beyond immediate challenges and positioning itself for long-term success.
The Midlands is also emerging as a key centre for operational modernisation and innovation. Businesses recognise that innovation will be essential to maintaining competitiveness in an increasingly demanding global market.
One of the clearest conclusions from the research is the need for long-term stability and greater regional focus in policymaking. Many manufacturers believe that while the Government’s Industrial Strategy has set out positive ambitions, there remains a gap between national policy objectives and practical support reaching businesses on the factory floor. Increasingly, manufacturers are calling for a more place-based approach that recognises the unique strengths and challenges of regional manufacturing economies.
For the South East Midlands, that means recognising the area’s strategic importance as both a manufacturing hub and a key part of the UK’s logistics infrastructure.
Resilient, ambitious and focused on the future
The report, ultimately, paints a picture of a sector that remains resilient, ambitious and determined to grow. Manufacturers in the region continue to face significant pressures, but they are responding through investment, innovation and strategic planning rather than retrenchment.
The challenge now is turning that optimism into sustained long-term growth. Achieving this will require a stable policy environment, continued investment in people and technology, and a regional approach that reflects the strengths of one of the UK’s most important manufacturing economies.
If those conditions can be achieved, manufacturers in the South East Midlands will be well placed not only to navigate uncertainty but to thrive within it.
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Manufacturing Partner
MHA
