State of industry report Q3 2022

11 November 2022

Our latest State of the Industry survey highlights the number of challenges faced by Britain’s food and drink manufacturers, with companies seeing input costs increase by an average of 21% over the past 12 months, with a similar rise expected next year.


Download (478 kb)

Executive summary

  • Industry’s confidence fell further in Q3 2022, to its lowest level since the FDF’s series started in Q1 2018. Overall, we see a pessimistic outlook for Q4, with over half of respondents expecting business conditions to continue to deteriorate in Q4 compared to Q3.
  • Persistent cost rises have eroded margins and manufacturers expect this to continue. In response, nearly 50% have cut or paused investment projects.
  • Labour shortages remain a significant brake on the industry’s growth, with the vacancy rate increasing to 9.1% in Q3, up from 6.3% in Q2. These vacancies range from high-skilled roles (engineers or scientists) to production operatives (machine operators or drivers).
  • Energy costs are unprecedentedly high. Energy reached 22% of operating costs in Q3 2022, up from 12% in 2021. 73% of businesses are worried about the outcome of new energy contract negotiations.
  • Businesses are prioritising investments that can help alleviate internal cost pressures. A key priority for manufacturers is to ensure an efficient use of energy and continued new product development (including packaging).
  • Manufacturers are looking for a range of government support to help them through this period, with 53% keen for tax incentives to support capital investment and 44% wanting to see a reduction in the costs and burdens of moving goods between the UK and the EU.

Download full report