Report

State of Industry Report Q1 2026

Published: 28 May 2026 Updated: 27 May 2026

Topics

State of industry Inflation

Business confidence among food manufacturers dropped to -64% in Q1 2026, the lowest levels since the energy crisis following the invasion of Ukraine in 2022. Energy price rises, caused by global supply chain disruption, are set to push up production costs – with 82% of manufacturers expecting to raise prices as a result.

Looking ahead, the outlook confidence score for the next quarter remains deeply negative at -51%. The sector is calling on government to support energy costs and minimise regulatory burdens to help ease the strain on businesses.

5 key takeaways

Costs are rising across the board, with energy, transport, plastic packaging and cleaning chemical costs rising sharply, driven by supply chain disruption.
To manage cost pressures, 82% said they will raise prices. Other planned measures include changing procurement strategies (44%), reducing marketing expenditure (33%), restructuring the workforce (33%), and cancelling or pausing investment (26%).
69% of manufacturers want government support on energy costs to be a key priority, alongside minimised regulatory burdens, including delays to NPM changes (28%) and realistic EU SPS transition timelines (23%).
The sector vacancy rate fell to 3.9% in Q1, down from 5.0% in Q4.
Looking ahead to Q2 2026, the sector’s outlook confidence stands at -51%, the lowest since records began in Q1 2022. Growing sales in the UK market remains the clear priority for 82% of manufacturers.

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