Uptick in data belies huge challenges for manufacturers, says Lancashire advisor

The region's manufacturers continue to deal with major challenges despite a surprise increase in a key manufacturing confidence barometer in April, according to a leading Lancashire-based advisor.

Ginni Cooper, manufacturing partner at accountancy and advisory firm MHA, was speaking after the release of the S&P Global UK Manufacturing PMI (purchasing manager’s index) data for April 2025.

Based on the survey responses of a panel of 650 UK manufacturers, the index saw a slight increase to 45.4 (up from 44.9 in March).

However, global trade tariffs, increases in wage costs and input cost inflation, are all hampering manufacturing businesses with output, new orders and employment all decreasing, according to the data.

MHA, which is the UK independent member firm of Baker Tilly International, has offices in Preston and Lancaster.

Ginni, who advises manufacturing and engineering businesses across the region, said: “The uptick in the manufacturing PMI has come as a welcome surprise, but it still remains well below the 50 threshold and, frankly, we’re not seeing a huge amount of optimism in the sector.

“The industry is operating in a subdued environment and is continually grappling with ongoing macroeconomic challenges.

This is also the first month that businesses in the sector will have paid both minimum wage pay rises and increases in employers' National Insurance.

“On top of this, the cost of electricity is the highest in Europe, placing additional demands on the bottom lines of manufacturers across the country and with the combined increase in costs causing them to think about cutting jobs.”

The PMI data is compiled by comparing survey responses to the responses from the previous month.

It is calculated using a number of indices that vary between zero and 100, with a reading above 50 indicating an overall increase compared to the previous month, and below 50 an overall decrease.

Ginni added: “With costs rising on every front and uncertainty around a trade deal between the US and the UK, our clients are being very cautious and delaying any long-term investment decisions.

“Until a deal is reached between the UK and the US, closer ties are forged again with our European neighbours, or an announcement is made on the long-awaited Industrial Strategy, the prospects for investment and, hence, growth remain weak.

“One recent bright spot in the gloom surrounding the sector was the government’s decision to seize control of British Steel which, hopefully secures not only supplies vital for our country’s infrastructure but also jobs in the sector.”