Navigating the challenges of rising manufacturing costs in the UK


As the outlook for the global economy remains uncertain, Arcadis highlights that the industrial manufacturing in the UK is facing the daunting challenge of rising costs. The combination of sharply increasing wages and labour shortages, an ageing industrial asset base, and more stringent environmental regulations, has led to a precarious situation for the sector.

There are several reasons for this development, of which inflation features most prominently in the national discourse and its impact was highlighted in Arcadis’ recent International Construction Costs 2023 report. While the Consumer Price Index (CPI) showed price increases of over 10% year-over-year for the beginning of 2023 and is only slowly moving down, some categories have been outliers. Amongst those, on an annual basis electricity prices are up 6.7% in August 2023, while steel prices are slowly retracting from last year’s highs that were up to 200% higher than levels in 2020.

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