UK small and mid-sized manufacturers saw sales revenue rebound and gross margins improve in Q3 2025 as lead times and inventory levels fell, according to new data.
The latest Manufacturing Health Index from inventory management software provider Unleashed found average UK SME sales reached £412,608 in the quarter, up 12.9% quarter-on-quarter but down 11.9% year-on-year.
The report also recorded gross margin percentage (GMP) at 39.66%, up 1.3 percentage points quarter-on-quarter and 3.0 points year-on-year.
Operational indicators in the dataset moved in a leaner direction. Average lead times fell from 27 to 19 days quarter-on-quarter, while purchase orders dropped 30% and stock on hand fell 27.2% over the same period.
Joe Llewellyn, general manager of ERP Small Business at The Access Group, Unleashed’s parent company, attributed the shift to a renewed focus on efficiency. “The last quarter was characterised by a determined push towards efficiency,” Llewellyn said.
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Llewellyn also argued that manufacturers are increasingly turning to data-led operations in a tougher cost environment, pointing to forecast-driven replenishment and real-time visibility of landed costs as priorities for 2026, alongside “the continued trend in industrial automation”, as firms look to do more with less.
Unleashed said the quarterly index is derived from transaction-level records captured in its platform, covering purchases, sales and stock movements since 2018.
For Q3 2025, it reported results based on a cohort of 1,578 manufacturers in the UK, Australia and New Zealand using its software.
The findings land against a mixed macro backdrop. Survey data suggested UK manufacturing only returned to modest expansion at the end of 2025 after an extended period of contraction, underlining how fragile demand conditions have been for much of the past year.
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