South East manufacturers have enjoyed a strong early summer following a surge in orders for the electronics sector according to a major survey published by Make UK and business advisory firm BDO.
The second quarter Manufacturing Outlook survey showed that output in the region climbed to a balance of +23% which is high by historical standards while orders at +4% also followed a similar positive pattern. This performance has translated into a boost for job prospects with recruitment intentions positive at +12%. Meanwhile investment (+19%) is also being ramped up in order to meet this demand.
The electronics sector is a major contributor to the South East economy and is likely to be linked to a surge in orders for the aerospace and defence sector.
Despite this the survey has also shown that manufacturers’ opinion of the United States as a positive growth market for exports has fallen sharply, with the US slipping out of the top three global regions for the first time. The US has dropped to fourth place for UK manufacturers as preference is shown to Asia/Oceania and the Middle East as companies respond to tariffs and increased uncertainty.
A survey on the impact of tariffs conducted by Make UK also shows that six in ten companies expect their export volumes to the US to be hit, while a similar number (63%) expect their business to be negatively impacted by tariffs. Furthermore, almost a third (30%) of companies are assessing changes to their supply chains in terms of where they source from, while more than a quarter (28%) are now seeking new markets. Just 4% of companies said they would now invest in manufacturing in the US.
The survey also reveals worsening prospects for manufacturers looking forward, with the manufacturing growth forecast for 2026 being slashed from a previous +1% to
-0.5%. Meanwhile the growth forecast is expected to be negative this year (-0.2%) off the back of a flat year in 2024, this presents a worrying trend of decline.
Commenting, Kerri Anne Mruk, Region Director for Make UK in the South East said:
“Despite the challenges and current economic uncertainty South East manufacturers have seen an upturn in their fortunes which is translating into much brighter conditions for companies across the region. It’s now vital that the upcoming industrial strategy is bold and ambitious to provide them with a long-term vision for the future of advanced manufacturing.”
Matthew Sewell, Head of Manufacturing at BDO in Southampton added
“This quarter’s results are a real boost to manufacturers in Southampton. The growing output levels in the region are proof of manufacturer’s resilience, and last month’s trade deals should only strengthen this.
“Whilst the sector’s overall forecasted decline in growth is concerning; the appetite for skilled recruitment and targeted investment is strong in the region.”
