Reflecting on 2024 and Looking Ahead to 2025: Manufacturing & Engineering

For 2025, we see the UK’s industrial manufacturing sector focusing on digital transformation, sustainability, and innovation. Key trends will include the adoption of Industry 4.0 technologies, increased automation, and a shift towards green manufacturing practices. Despite challenges such as supply chain disruptions and rising costs, the sector is expected to grow, driven by government support and investment in research and development. The demand for skilled professionals will rise, emphasising the need for continuous learning and workforce development. 

Over the last 12 months the Industrial Manufacturing Practice has had a busy and productive period. The theme of succession management continued to be a significant one in our activity, with new appointments at CEO, Managing Director, Group Operations Director, and Site Director level to introduce the next leadership cadre to our clients. Whether it be family-owned machinery manufacturers, listed aerospace businesses, global speciality chemicals and electronics groups, private equity owned materials specialists, or listed petrochemical organisations, we enjoyed a great variety of challenges in finding a new generation of leadership talent for these key manufacturing businesses.  

Chemicals & Advanced Materials 

The UK’s Chemicals & Advanced Materials sector remains a subdued world – high energy costs, combined with depressed customer demand, and ongoing issues from Brexit, continue to weigh on our nationally-led chemicals groups. There is a significant shortage of talent at all levels – which has been addressed in part by highly-skilled people relocating to the UK in recent years – but this will continue to be a major challenge to employers for some time.  

Just as concerning, if not more so, is the lack of investment in new manufacturing capability across the UK’s asset fleet. We are still a fantastic breeding ground for new technologies, from our world-leading universities and in the R&D laboratories of the large multi-national players, but moving to large-scale production is simply not a commercially viable option for many of these spin-outs and start-ups.  

We expect 2025 to be another challenging year for the Chemicals market, with its focus on sustainability, digital transformation, and innovation. Key trends include green chemistry, circular economy practices, and advanced manufacturing technologies. The sector will also face challenges such as rising costs and regulatory changes, driving demand for skilled professionals to navigate these complexities.  

In 2025, the Chemicals sector will place an emphasis on the following technologies: 

Green Chemistry: Focus on sustainable and eco-friendly chemical processes.  

• Advanced Manufacturing: Use of robotics, digital twins, and immersive reality to enhance production. 

• Artificial Intelligence (AI): Optimising production processes and improving material quality. 

• Internet of Things (IoT): Enhancing connectivity between devices for better asset performance and worker safety. 

• Blockchain: Securing data and supply chains to address cyber threats 

Process Industries 

The broader Process Industries world, in particular Building Materials and Metals, is at a potential turning point this year. Whilst new-build house growth will be modest in 2025, it is expected to increase in 2026, which may lead to increased product demand this year. The wider Construction sector looks healthier, and should provide manufacturers with a steady source of orders for new projects across the UK. We will hopefully see new renewable sector projects come on-stream, for wind, nuclear, hydrogen, sustainable aviation fuel, and carbon capture storage, all requiring a significant input from a UK-based supply chain.  

Key themes for 2025 include the following: 

Building Information Modelling (BIM): Enhancing project planning, design, and management. 

• Artificial Intelligence (AI): Improving efficiency, safety, and predictive maintenance. 

• Sustainable Materials: Focus on eco-friendly and energy-efficient building products. 

• 3D Printing: Accelerating construction processes and reducing waste. 

• Internet of Things (IoT): Enhancing connectivity and smart building solutions 

Automotive   

The automotive sector has remained robust, despite significant challenges with a changing customer profile and some OEM’s rolling back their commitments to being fully electric by 2030. There has been positive news regarding multi £bn investments being made in gigafactories that will support the transition to zero emission vehicles. The demand for skilled professionals in EV technology, software development, and sustainable practices will rise, emphasising the need for continuous learning and workforce development.  

In 2025, the UK’s automotive sector will be dominated by several key technologies: 

Electric Vehicles (EVs): Continued growth in EV adoption, driven by advancements in battery technology and government incentives. 

• Autonomous Driving: Enhanced AI algorithms and sensor technologies will improve the safety and efficiency of self-driving cars.  

• Connected Cars: Integration of IoT for real-time data sharing, vehicle-to-everything (V2X) communication, and smart cockpit features.  

• Sustainable Materials: Increased use of eco-friendly materials and green manufacturing practices.  

• Advanced Manufacturing: Adoption of Industry 4.0 technologies, including automation and additive manufacturing.  

Aerospace & Defence 

We expect a very strong year for the Aerospace and Defence sectors in 2025, driven by advanced technologies , and underpinned by a significant government commitment to bolstering spending with UK manufacturers and long-term support for R&D.  With global conflicts continuing, NATO spending levels are under review, particularly with the pressures from the incoming US government raising expectations to 5% of GDP to be spent on defence. 

In 2025, the UK’s aerospace sector will be dominated by several key technologies: 

Artificial Intelligence (AI): Enhancing supply chain visibility, cost efficiencies, and operational safety. 

• Additive Manufacturing: Accelerating part development and introducing novel materials. 

• Sustainable Aviation Fuels (SAF): Reducing carbon footprints and supporting net-zero goals. 

• Advanced Satellite Technology: Miniaturising systems for cost-effective scientific and military applications. 

Precision Engineering 

In 2025, the UK’s precision engineering sector will be driven by advancements in automation, AI, and sustainability. Key trends include smart factories, predictive maintenance, and green manufacturing practices. The sector will face challenges such as rising costs and regulatory changes, but opportunities for growth will arise from innovation and international partnerships. The demand for skilled professionals will increase, emphasising the need for continuous learning and development.  

In 2025, the sector will focus on the following technologies:  

• Industry 4.0 Technologies: Including IoT, AI, and big data analytics, enhancing production efficiency and predictive maintenance. 

• Advanced Robotics: Improving precision and reducing human error in manufacturing processes. 

• Additive Manufacturing: Enabling rapid prototyping and the production of complex components. 

• Sustainable Engineering Practices: Focusing on eco-friendly materials and energy-efficient processes. 

• Digital Twins: Creating virtual models of physical assets to optimise performance and maintenance. 

Overall, we are optimistic for a strong 2025 for the Industrial Manufacturing Practice, and look forward to a busy and productive year. For more information, please contact us.