2025 headwinds deliver blow to UK manufacturer confidence, as Government is urged to support electrical supply chain

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  Posted by: electime      1st May 2025

  • While electrification sales reached a 3-year high point in Q4 2024, business optimism fell under the 5-year average, the lowest figure in the last 6 quarters
  • Current network investment programmes are underspending by approximately 50 per cent
  • Supply chain capacity utilisation is averaging a concerning 76 per cent, with 55 per cent of surveyed manufacturers operating at levels between 71 per cent and 90 per cent
  • Green shoots of investment in the last quarter show a willingness by manufacturers to invest in UK infrastructure under the right conditions
  • BEAMA calls on UK Government to provide investment clarity to the electrical supply chain in the upcoming Industrial Strategy

BEAMA – the trade association representing manufacturers of electrical products spearheading the drive to electrification and a sector valued at £14bn – has launched its latest Market Pulse quarterly report at Innovation Zero, the UK’s largest Net Zero Congress.

The new analysis reveals that while the supply chain saw a positive upturn towards the end of last year, reaching a three-year high point for electrification related sales in Q4 2024, there has been a worrying drop in business optimism, falling below the 5-year average, while investment intentions for 2025 worryingly plateaued.

BEAMA’s report highlights several key factors undermining industry optimism despite strong sales last year. These include rising unit costs, driven by increased employment expenses following the Autumn Budget, persistently high energy prices, and ongoing uncertainty surrounding the impact of US trade policy.

The industry survey, shared with BEAMA’s 200 members, shows that given these challenges, UK manufacturers require absolute certainty from Government regarding policy and the regulatory framework surrounding procurement practices. The upcoming Industrial Strategy should aim to unlock investment into this critical £14bn sector to ensure the UK has the technical products needed for the net zero transition.

Clarity in investment planning is particularly important to secure the energy network equipment required to meet the expected surge in electrification, especially as current network investment programmes are underspending by approximately 50 per cent.

Currently, capacity utilisation in the supply chain is running at a worryingly high average of 76 per cent, with 55 per cent of manufacturers surveyed hovering between 71 per cent and 90 per cent. With electricity demand predicted to grow 70 per cent by 2035, a tenfold increase for some sectors, building out capacity is an urgent priority to deliver on the Government’s clean power ambitions.

Yselkla Farmer, CEO of BEAMA, comments: “Capacity utilisation is being squeezed by a reactive, ‘just-in-time’ approach to network procurement — a model that undermines investment and planning. If we want a reliable, future-ready grid and to hit our Clean Power 2030 targets, Government must reform the procurement framework to support steady, proactive investment. Trust in the system — from manufacturers to markets — hinges on this. ”

However, BEAMA’s report also showcases green shoots of business optimism that have delivered significant investment into new facilities and created hundreds of new local jobs.

For example, BEAMA members, Schneider Electric and Vaillant have recently invested a combined £82m in new electrification related facilities resulting in 400 new ‘Green Jobs’, with both utilising clean power within their new factory environments.

Additionally, Siemens Energy has invested in a new panel building facility creating 65 new jobs whilst re-structuring their resource hiring policy towards a ‘hiring for potential’ framework based on behavioural based assessments.

In the long term, BEAMA members report universal plans to maintain or increase investment over the next five years in all business areas.

Farmer concludes with a clear message to Government: “We have the data and the manufacturing knowledge within BEAMA, which is critical to policy aspirations; now it is time for Ministers to engage with the companies that add value to our Clean Power 2030 vision both in terms of capacity building for new capital resource and green skills. This is the moment to have a clear Industrial Strategy for electrification which touched on the whole value and supply chain”.