Story Highlight
– UK manufacturing production increased for the first time in a year.
– Productivity gap noted compared to international manufacturing peers.
– New EU regulations simplify sustainability reporting requirements.
– Extended producer responsibility scheme for textiles introduced in EU.
– US pauses rare earth export controls with China amid tensions.
Full Story
The latest figures indicate a notable resurgence in the UK manufacturing sector, as production showed an increase in October for the first time in a year. This upward trend continued into November, where output rose for a consecutive second month, and the level of new business appeared to stabilize following a prolonged period of decline that stretched over more than a year. These findings have been corroborated by the Purchasing Managers’ Index (PMI) released by S&P Global and insights from The Manufacturer.
Despite these glimmers of recovery, a recent analysis by The Manufacturer in collaboration with Barclays reveals a troubling productivity disparity between the UK manufacturing industry and its international counterparts. Furthermore, the 2025 Industrial Agility Assessment highlights that the adaptability and responsiveness of UK manufacturers and distributors have diminished, reaching the lowest point in five years.
The issue of environmental, social, and governance (ESG) reporting continues to loom large over the manufacturing landscape. In response, the Competition and Markets Authority (CMA) has issued supplementary guidance to its Green Claims Code. This guidance delineates the responsibilities of businesses concerning the complexities of supply chains, wherein various entities may possess the information required to validate environmental claims.
On the European front, regulatory developments are reshaping the landscape of corporate sustainability. Significant changes were enacted on 16 December 2025, when the European Parliament ratified the final Omnibus I text, which aims to alleviate regulatory pressures on businesses by simplifying the requirements linked to the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD). A pivotal alteration includes raising the reporting threshold to encompass companies with over 1,000 employees and an annual turnover of €450 million, while limiting due diligence obligations to larger firms with over 5,000 employees or €1.5 billion in turnover. Compliance is mandated by 2029.
Concurrently, the European Commission (EC) is undertaking consultations to revise the New Legislative Framework (NLF) for product legislation, a move aimed at enhancing consumer safety, sustainability, and fair competition, particularly in the context of the circular economy and digital transformation. Relatedly, the EC is deliberating on a proposed Circular Economy Act, intended for adoption in 2026, focusing on improving e-waste recycling and augmenting demand for secondary critical raw materials. Through this initiative, the EC aims to diminish dependence on imported materials, foster economic resilience, and support efforts for decarbonisation.
In line with sustainability efforts, amendments to the extended producer responsibility plan for packaging waste (pEPR) will come into effect in the UK from 1 January 2026. These adjustments will facilitate the appointment of a producer responsibility organization to assist PackUK in administering the scheme and foster closer collaboration among producers. Moreover, producers will have the opportunity to deduct the tonnage of recycled food-grade plastic packaging waste from their pEPR responsibilities if they collected it directly from consumers and routed it into closed-loop recycling systems.
Additionally, the EU’s Revised Waste Framework Directive is instituting an extended producer responsibility (EPR) scheme for textiles introduced to the EU market, encompassing various products, including garments and household textiles. This regulation shifts the responsibility for end-of-life management—such as collection and recycling—onto producers, thereby requiring EU member states to operationalise these schemes by 2028.
Moreover, the EU Deforestation Regulation (EUDR) is facing anticipated delays, with rescheduled implementation dates for large and medium enterprises set for 30 December 2026 and for micro and small businesses slated for 30 June 2027. The latest updates on this regulatory framework are closely monitored by stakeholders.
Looking ahead, the Environmental Protection (Wet Wipes Containing Plastic) (England) Regulations 2025 will take effect in May 2027, rendering it illegal to supply single-use wet wipes that contain plastics, albeit with specific exemptions in certain contexts like pharmacies or medical settings. A parallel measure is anticipated in Wales, with similar legislation poised to commence in December 2026.
To address microplastic pollution, EU regulations will largely come into force by December 2027, targeting economic operators managing substantial quantities of plastic pellets. Key requirements include the implementation of risk management plans, employee training for handling and transport protocols, and stringent record-keeping standards.
At a global level, discussions aimed at creating a legally binding treaty to manage plastic production foundered at the fifth Intergovernmental Negotiating Committee session in August 2025, highlighting the ongoing divide between countries advocating for restrictions on production and those advocating for improved waste management strategies.
Another pressing issue stems from the use of per- and polyfluoroalkyl substances (PFAs), commonly referred to as “forever chemicals,” which are notorious for their persistence in the environment and potential health risks. The UK Chemical Reactions Conference, held on 16 October, urged businesses to phase out PFAs from their supply chains to mitigate the risk of litigation reminiscent of cases seen in the United States. Furthermore, on 3 November, reports emerged indicating that the Drinking Water Inspectorate issued enforcement notices to 23 water companies regarding elevated PFAs levels, signalling forthcoming regulatory reforms pertinent to PFAs and drinking water standards.
In the realm of product safety, the Product Regulation and Metrology Act 2025 has secured Royal Assent, laying the groundwork for enhanced scrutiny and regulation of products, with forthcoming provisions expected to be established through secondary legislation in due course.
Amid ongoing global geopolitical tensions, particularly concerning trade controls from China, the demand and availability of critical minerals are undergoing significant scrutiny. Recent announcements from the White House indicated a temporary pause on controls affecting China’s rare earth exports to the US. This development coincides with various agreements between the US and nations such as Japan, Malaysia, and Australia to secure access to these vital minerals, a strategy aimed at diversifying supply chains.
The UK government is also making strides toward improving trade relations with developing economies through the introduction of the Developing Countries Trading Scheme. This initiative is designed to streamline import processes from nations including Nigeria and Bangladesh, especially within the clothing and electronics sectors.
Furthermore, the UK’s new Industrial Strategy Partnership with France seeks to prioritise advancements in technology and clean energy, with a concerted focus on securing supply chains for critical minerals. As the EU navigates similar challenges, concerns have been raised by mining and refining companies over impending regulations that could jeopardise the cobalt industry, raising fears of increased dependence on external markets for essential resources.
The government’s strategy additionally encompasses plans for constructing multiple new factories aimed at bolstering munitions and military explosives production within the UK, intending to enhance national defence readiness while simultaneously generating employment opportunities across the country. This ambition is backed by a £1.5 billion defence investment and marks a critical shift towards revitalising domestic manufacturing capabilities in response to contemporary security exigencies.
Our Thoughts
The article highlights significant advancements in UK manufacturing but lacks direct mention of incidents where health and safety standards were breached. However, the emphasis on compliance with new regulations, such as the Corporate Sustainability Reporting Directive (CSRD) and safety regarding PFAs, suggests areas for improvement to bolster health and safety in the sector.
To prevent potential health and safety issues, firms should enhance their risk management policies in accordance with the Management of Health and Safety at Work Regulations 1999, ensuring thorough training and assessment of workplace hazards, particularly concerning chemical handling like PFAs.
Additionally, the introduction of the Product Regulation and Metrology Act 2025 underscores the necessity for rigorous product safety standards. Non-compliance could lead to serious health risks, suggesting that manufacturers must adopt a proactive approach to safety compliance.
Key lessons include the importance of maintaining comprehensive safety monitoring systems and regularly updating training protocols in response to evolving regulations. Implementing these measures could mitigate risks, enhance workplace safety, and align business practices with UK health and safety legislation.
