But is this a normal dip? And can industry players find a way to bounce back into a strong January as they have done before?
In the latest production figures – as part of the wider GDP reading – there was an overall increase in manufacturing. This was attributed to automotive production leaping. But under the headline figure there was a drop for food manufacturing production. It was not nearly as significant as construction (which saw the largest contraction) but October’s reading still marked a 0.5% reduction year-on-year.
The result of this fall – following five months of growing output – can be attributed to the act of many businesses holding their breath before the contents of the Budget were revealed. It was a reaction that happened across industries as ideas were floated in the run up, and we may well see a similar reading for November when the data is revealed in January.
Nonetheless, now that manufacturers have the conditions of the Budget set out they are able to understand what the path looks like going forward. For this industry we often see that whilst the bumpiness of the path is important, it isn’t as important as how clear it is.
Manufacturers are resilient and talented. Many will have already put into place modernisations, and it appears that these may have been taking effect before October as production levels kept rising until becoming level with January’s peak.
Given rising employment costs and the burden of the employment legislation it is likely these modernisations will continue. With production and cost efficiency needing to improve enhanced automation will become more appealing to manufacturers.
In the short term, however, business leaders will want to see that consumer confidence is rising in order to push production levels towards a January peak once more.
How to drive efficiency
One of the areas that can contribute to efficiency and reaching peak production will be the cost of energy. And we’ve certainly seen that some manufacturers are taking control of this aspect of their business.
With large roof space many have been installing solar panels, which are often cheaper to lease through finance than the cost of energy from the grid, and capitalising on the energy they generate to cut their bills and bring greater energy security.
Across the UK solar has become the most common planning application made for renewables, and 4,000 applications have been granted since 2015. We have also seen that the generation size of these projects is increasing with time. In the first half of 2025 the size of approved projects exceeded 3GW – the highest on record.
Additionally, there have been third party suppliers installing wind turbines, solar panels, or in one case in the north of England a waste-to-energy plant, next to manufacturing hubs to supply directly and exclusively.
It is an enterprising opportunity and one that many manufacturers are getting on board with as they seek to cut or bring greater consistency to their costs.
For food manufacturers, this data isn’t just about how production levels have dropped – the upward trend was reasonably positive before October – but why and how it can bounce back to start climbing again. And even now we are seeing options for exit by manufacturers being approached for acquisition and potentially refinance as interest rates look to come down.
The industry needs confidence and clarity on the path forward. And even with consumer spending tight and the road bumpy, having the Budget announced means some manufacturers will have a better chance of discovering a route forward.
The post-budget feeling might not be one of committing to a full foot to the floor, but assessing the routes to take there can be a key in the ignition, ready to turn in January.
About the author
Julie Palmer is a partner at Begbies Traynor - an independent business recovery specialist,