UK electronics manufacturers have posted a disappointing first quarter sales performance, despite the wider small to medium-sized business (SMB) manufacturing sector performing well.
New figures show that across the 12 manufacturing categories analysed, the average small-medium UK manufacturer increased sales by 30% in Q1 2025 compared to Q4 2024 – and 13% year-on-year.
However, the average small-medium UK electronics manufacturer made -23% less sales revenue in Q1 2025 than Q4 2024, and -43% less year-on-year.
The findings – based on direct data from over 600 UK firms using Unleashed’s inventory management software – show pessimism amongst the business community may have merit.
Recent Q1 business confidence surveys show overall confidence turned negative for the first time since 2022 on the back of tax rises, inflation, weak growth and increased global uncertainty.
Unleashed’s data also showed profitability in the electronics sector has dropped. Gross Margin Return on Inventory (GMROI) for electronics manufacturers fell -23% against Q4 – but improved by 17% YoY, to £4.33 return for every pound spent on buying stock.
Joe Llewellyn, GM of ERP Small Business at The Access Group, the parent company of Unleashed, said that despite the headwinds felt in the electronics sector, the unusual business conditions of the first three months of the year had generally played out well for the country’s smaller producers, as had falling bank rates.
“Anecdotally, what we’re hearing from some of our customers is that Q1 brought welcome windfalls,” added Llewellyn. “Some tariff-affected international customers have turned to UK firms to do business, while others raced to order more before tariff pauses came off. That’s delivered a shot in the arm for some firms, but more importantly we’re hearing that steadily falling bank rates are starting to stimulate the economy, which obviously is very welcome to UK manufacturers who’ve posted a really strong start to the year.”
