Demand for manufactured goods remains subdued by the cost of living crisis

Reflecting on the UK manufacturing sector’s performance during the first quarter of 2023, Glynn Bellamy, UK Head of Industrial Products, KPMG, said:

“Supply has improved and some input costs have fallen, yet the UK manufacturing sector is struggling compared to some parts of the economy – as domestic and export demand for manufactured goods remains subdued by the cost of living crisis and short-term demand is adversely impacted by de-stocking in supply chains.  The latter is the negative side of the easing of supply chain pressures and the unwind of the benefit many manufacturers experienced in 2021 and 2022 as there was a drive to build safety stock levels.  Production volumes have subsequently fallen, costing jobs in the sector. 

“Whilst some input costs have fallen, UK energy prices remain significantly in excess of those in North America and the Far East, placing ongoing pressure on UK competitiveness.  Given these dynamics, UK manufacturing needs an upturn in global consumer confidence to lead to more big ticket purchasing, but manufacturers will be acutely aware how volatile the global consumer landscape remains, particularly with the ongoing uncertainty over future interest rate rises.”

ENDS.

Media contact:

Steven Reilly-Hii, Media Relations Manager, KPMG LLP, E: steven.reilly-hii@kpmg.co.uk , T: 07510 376635.

About KPMG UK:

KPMG LLP, a UK limited liability partnership, operates from 20 offices across the UK with approximately 17,000 partners and staff. The UK firm recorded a revenue of £2.72 billion in the year ended 30 September 2022.  

KPMG is a global organization of independent professional services firms providing Audit, Legal, Tax and Advisory services. It operates in 143 countries and territories with more than 265,000 partners and employees working in member firms around the world. Each KPMG firm is a legally distinct and separate entity and describes itself as such. KPMG International Limited is a private English company limited by guarantee. KPMG International Limited and its related entities do not provide services to clients.