US drops out of top 3 global markets for manufacturers

17 June, 2025

According to the Make UK/BDO Q2 Manufacturing Outlook survey, the US has slipped to fourth place as a growth market for UK manufacturers, with preference now shown to Asia/Oceania and the Middle East as companies respond to tariffs and increased uncertainty (1). This is the first time the US has not been the second most favoured destination for export growth for UK manufacturers, behind the EU, in the history of the survey.

Separate data from a survey on the impact of tariffs conducted by Make UK shows that six in ten companies expect their export volumes to the US to be hit, while a similar number (63%) expect their business overall to be negatively impacted. Furthermore, almost a third (30%) of companies are assessing changes to their supply chains in terms of where they source from, while just 4% say they will consider setting up manufacturing facilities in the US.

Make UK also referred to figures from the Q2 survey carried out by its American counterpart, the National Association of Manufacturers, which showed that US manufacturers’ optimism has dropped to the lowest level since the pandemic. Trade uncertainty was cited as the biggest factor, reported by more than three quarters of companies (77%).

The survey also reveals worsening prospects for UK manufacturers ahead, with the growth forecast for manufacturing in 2026 slashed from a previous +1% to -0.5% in the face of a weak domestic economy and tariffs. Given the growth forecast is also negative for this year (-0.2%) off the back of a flat year in 2024, this presents a worrying trend.

In response to the significant downgrading of growth prospects for manufacturing, Make UK warned that the forthcoming industrial strategy must address the UK’s crippling industrial energy costs.

Commenting, Seamus Nevin, Chief Economist at Make UK, said: “While at first glance the headline numbers may not look too bad, manufacturers are facing a gathering storm of huge uncertainty in one of their major markets, a skills crisis and eye watering energy costs which are providing a harsh reality for many. In response, it’s absolutely essential that the forthcoming industrial strategy takes bold measures to bring down the cost of energy and takes equally radical action to ensure companies can access the people they need to take advantage of a more competitive landscape. If these two issues are not addressed, then we will face the serious prospect of the UK accelerating into de-industrialisation.”