A Cumbrian accountancy firm says manufacturers are waiting for next month's budget announcements before they make long-term investment decisions.
According to a partner at Kendal-based accountancy and advisory firm MHA, many are waiting to see what support might be announced in the upcoming autumn budget before committing funds.
Ginni Cooper, who advises businesses in the manufacturing and engineering sectors, said the current climate of uncertainty is weighing on decision-making.
She said: "This will come as little surprise to most in the industry as manufacturers are holding their breath awaiting the outcome of November’s Budget.
"They are desperately seeking some certainty to give them the confidence to invest.
"The sector has recently been hit by a series of setbacks.
"Increased employment costs have already forced many businesses to reduce headcount, while lingering tariff uncertainty is clouding future planning."
Ms Cooper’s comments follow the latest UK Manufacturing Purchasing Managers’ Index (PMI), which fell to 46.2 in September from 47.0 in August.
According to the latest PMI data, compiled by S&P Global, four of the five components (output, new orders, employment and stocks of purchases) were at levels consistent with a worsening of operating conditions.
She also pointed to a cyberattack on Jaguar Land Rover.
Ms Cooper said: "Most recently, the cyberattack on Jaguar Land Rover sent shockwaves across the entire ecosystem.
"Although government intervention helped stem the crisis, the incident created an immediate cash flow emergency for many small and medium-sized enterprises."
She warned that the attack exposed broader vulnerabilities in the sector.
She said: "Cyber security was flagged as one of the top three challenges facing manufacturers in our latest manufacturing survey and this latest event highlights a critical structural weakness that a shock to one major player is enough to cripple the wider supply chain."
She said: "Manufacturers have exhausted their pricing power.
"Customers are now highly price sensitive and simply buying less."
Looking ahead to the autumn budget on November 26, Ms Cooper called for targeted support.
She said: "To revive the sector, the industry needs the Chancellor to back the growth agenda by injecting significant funding into the Industrial Strategy.
"However, the most effective tool to restore investment and confidence quickly is to be bold and cut Corporation Tax.
"If you provide businesses with confidence, they will generate profits."
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