Sarah Collins, Head of SME Industries, Barclays
Barclays’ Head of SME Industries Sarah Collins explains why UK manufacturers should be investing for the future today.
Manufacturing is one of the UK’s most strategically important industries. It powers productivity and innovation, sustains jobs, generates exports, and underpins the nation’s long-term competitiveness. Yet the sector is also under pressure. Skills shortages, rising employment costs, high energy prices, fragile supply chains, and cybersecurity risks are just some of the headwinds our clients are navigating every day.
A sector under strain, but not standing still
Our latest Q2 Barclays Business Prosperity Index research reflects this mixed picture. On the one hand, 85% of manufacturing leaders remain confident in the prosperity of their own businesses, and more than half are optimistic about the wider UK economy. On the other hand, almost three quarters (72%) of UK manufacturers haven’t borrowed to invest in the past year. Thirty-four per cent have considered it but ultimately chose not to proceed – with many citing interest rates, economic uncertainty, and caution ahead of the Autumn Budget.
This hesitancy is understandable. An ageing workforce and persistent skills shortages are raising operational costs. Energy prices remain structurally higher than many global competitors, threatening competitiveness. Supply chain fragility continues to push up costs and stretch lead times, while new cybersecurity risks are demanding constant risk mitigation. For many family- owned firms, upcoming changes to inheritance tax are also prompting a more cautious approach to capital expenditure.
Cautious but committed to growth
Despite these challenges, intent to invest has not disappeared. Our data shows 53% of SMEs intend to increase investment in the next 12 months, compared to 67% of large companies, with SMEs planning an average uplift of 4.8% and large companies 10.2%. If SMEs matched the rate of larger firms, up to £60 billion in new investment could be unlocked annually across the UK economy.[1]
In manufacturing, the areas drawing the most attention are those that address long-term pressures: automation and AI to manage labour and cost constraints; decarbonisation to mitigate energy risks and meet climate targets; and re- shoring or near-shoring to strengthen supply chain resilience in the face of tariff uncertainty.
How Barclays can help
At Barclays, we are fully committed to supporting manufacturers in this moment of challenge and opportunity. In 2025 alone, we have made £22 billion of lending available to help businesses across the UK grow and thrive, including £9 billion already lent in the first half of the year.
We understand the vital role manufacturers play in the economy, and the unique challenges that come with come with running a manufacturing business. We know that our partners in manufacturing need financial tools that help them act decisively when opportunities arise, while building resilience for the long term. That is why Barclays offers a broad set of financial tools designed to help business leaders seize opportunities as they arise and maintain a competitive edge in the global market. Our Business Relationship teams can also help with local knowledge, sector expertise and connections to specialists. From working capital finance designed to bridge gaps between contract wins and getting paid, to asset finance in the UK via our partner Propel, the aim is simple: to help businesses manage commitments and take full advantage of a landscape poised for serious growth.
barclays.co.uk/business-banking/sectors/manufacturing/
[1] home.barclays/news/press-releases/2025/09/60-billion-boost-to-UK-economy-through-increased-investment-by-SMEs/
