The forecast for basic metals subsector growth in 2025 has deteriorated to a 17% decline, compared to the previous forecast of a 9.5% drop, Make UK says in its latest outlook seen by Kallanish. This reflects the challenging trading environment as a result of US tariffs and wider geopolitical tensions.
The manufacturing outlook report for the third quarter notes that manufacturers in specific subsectors including automotive and metals producers will still face challenges to export. However, it does notes that despite the shaky ground on which global trade is operating at the moment, it is surprising how well international trade has performed.
The forecast for basic metals subsector 2026 output growth is a decline of 8.6%, slightly improved from the previous forecast of a 11.3% decrease.
A 10% decrease in employment is also being forecast for this year.
Meanwhile, the fabricated metals subsector is expected to see stronger output growth, largely because of its close ties to the basic metals subsector. This is because as the cost of raw materials rises, the value of metal processing services increases, providing a boost to growth, Make UK notes.
However, despite this, due to the impact from tariffs, output is expected to decline by 4.2% in 2025, and 0.4% in 2026.
The outlook notes the trade uncertainty facing manufacturers, with ever changing tariff rules. Most recently, the US expanded its tariffs further to include 407 derivative products, including aluminium and steel in car parts, packaging and pharmaceuticals.
It adds that companies will have to over-pay duty to avoid customs penalties, with a high administrative burden of calculating inconsistent metal contents in shipments.
Depending on how downstream manufacturers choose to recover costs, knock-on effects will likely be felt throughout supply chains, it adds.
The rapid pace and uncertainty of trade updates have left many companies unable to conduct essential risk assessments. In response, a growing number of manufacturers are signalling that they may offset these pressures by increasing product prices.
These global uncertainties are also reflected in the 2025 forecast of an increased UK trade deficit, as imports rise almost three times as rapidly as exports, Make UK concludes.
Carrie Bone UK
