UK Subcontract Manufacturing: A 2025 Rebound after a Tough Year

Market down 23 percent Disappointing year for UK-subcontract manufacturing

2025-01-30 Source: Qimtek 1 min Reading Time

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After a rocky year for UK subcontract manufacturing, with market activity plunging by 23 percent in 2024 due to post-Budget uncertainty, optimism returns in early 2025. Despite last year’s setbacks, new data points to a rebound, signaling renewed momentum for the sector.

The last two quarters of the year 2024 were pretty poor for UK subcontracting companies.(Source: free licensed / Pixabay) — The last two quarters of the year 2024 were pretty poor for UK subcontracting companies.
(Source: free licensed / Pixabay)

The UK subcontract manufacturing market is hoping for a more positive outlook in 2025 following a disappointing 12 months. According to the latest Contract Manufacturing Index (CMI) data, levels of business were significantly down overall compared to the previous year — falling sharply after the Budget at the end of October. Overall the market was down 23 percent on 2023.

After a strong first quarter, coming off the back of a strong end to 2023, the market dipped in the second quarter due to uncertainty in the market over the coming General Election.

Gallery

There was a boost in confidence and optimism following the election which saw the market rally in July. Activity then stalled after the Budget as companies put projects on hold due to concern about increased costs.

On a positive note, there are indications that the market has picked up in the first month of 2025.

The average contract manufacturing index (CMI) for the year was 59 compared to 77 in 2023. The CMI for October was 62 and this fell to 39 in November and 27 in December.

Commenting on the figures, Qimtek owner Karl Wigart said: “The last two quarters of the year were pretty poor, which feel was mainly due to the budget in the autumn. This caused a lot of uncertainty in the engineering market. Buyers were delaying their new projects to see what the budget would bring and how the market would respond.

“We have also done some research on overall trends and it is obvious that the first quarter is the busiest for buyers of custom made parts and we are seeing activity picking up during this first month of 2025.”

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