The UK manufacturing sector is facing geopolitical headwinds while adapting to post-Brexit realities. At the same time, the UK government lacks a clear, long-term plan for the sector. Consequently, the modest growth rate for IT Services in UK manufacturing, 1.4% in 2025, reflects the challenging macro-environment with stalling GDP growth and continued geopolitical instability. Therefore, from an enterprise IT point of view, the opportunities are around projects driving efficiency gains and automation. However, the hype around Generative and Agentic AI is misplaced and will not stimulate the sector in the short term. Rather, legacy application transformation services, such as the migration of SAP to S/4HANA, or disruptive platforms such as ServiceNow, offer short to near-term opportunities.
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