Technology, skills and infrastructure should be the government’s top three priorities in its upcoming Industrial Strategy, according to a Cumbrian accountancy firm's report.
MHA, which has a Kendal office at Murley Moss Business Village, conducted a survey of 1,000 manufacturing business owners and executives.
35 per cent of respondents identified recent employment tax increases as their biggest challenge.
Andrew Matthews, partner at MHA, said: "The North West of England remains one of the UK’s most significant manufacturing hubs in 2025, contributing substantially to national output."
He said the region is experiencing pressure from rising energy prices, raw material costs, and employment taxes, all of which are expected to affect profit margins into 2025 and beyond.
Mr Matthews said: "Our North West responses reflected what I am seeing in my clients, with recruitment, particularly of apprentices, being high on the agenda."
He said manufacturers are not waiting for government intervention to address the skills gap, noting that many are creating apprenticeship programmes, forming training partnerships with colleges and universities, or investing in AI.
Despite the challenges, the report found optimism in the sector.
Nearly all respondents expect some level of growth over the next 12 months, with 55 per cent forecasting growth of three to five per cent.
In the North West, 45 per cent of respondents plan to increase R&D investment by three to five per cent, and 31 per cent expect to raise it by more than six per cent.
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