As with the GDP data, the latest version of the UK National Accounts brings us revisions from both the re-basing exercise and, for the most recent periods, the release of new data. The headlines from the latter show that while total business investment fell by -1.1% compared to Q1-2025, the manufacturing sector saw an increase of +0.5%, with the engineering & vehicles group growing by +2.6%.
Starting with the recent data, we should note that the pace of the quarter-on-quarter decline in total business investment has been reduced from the first estimate when it was put at -4.0%; similarly, although not quite as dramatically, spending on “ICT & Other Machinery” is now shown as falling by -1.6% (-2.4% in the first data release).
The National Accounts release brings us new data in the form of a breakdown of the headlines to give the trends for the manufacturing sector and the sub-set for the Engineering & Vehicles group of industries. As noted in the introduction, these have done slightly better than the overall Business Investment trend in Q2-2025. Looking back to the same point in 2024, manufacturing investment has grown by +4.6% and spending by the engineering & vehicles group is up by +5.3%. In the 2nd quarter of 2025, manufacturing investment accounted for 11% of total business investment, with the engineering & vehicle group generating 40% of total manufacturing investment.
The historical trends which are affected by the revisions related to the re-basing process contain the bad news element of this story. The table below summarises the changes over the past three years, from which you can see that the positive trends have been turned round.
| Year-on-Year trend in UK Manufacturing Investment | Year-on-Year trend in UK Engineering & Vehicles Investment | |||
| Year | 2022 based data | Revised 2023 based data | 2022 based data | Revised 2023 based data |
| 2022 | +6.7% | -3.4% | +4.2% | -6.5% |
| 2023 | +3.9% | -7.5% | +3.6% | -5.3% |
| 2024 | +0.2% | -7.3% | +1.7% | -3.3% |
Given that there is little change in the total business investment data (except in 2023), it seems likely that the re-basing, which includes updated methodologies, especially for data on R&D expenditure, may have led to a reallocation between sectors, away from manufacturing to other parts of the economy.
All of the trends in this note are seasonally adjusted at constant prices.
You can download the ONS Statistical Bulletin for the National Accounts from their website at https://www.ons.gov.uk/releasecalendar (30 September) or request it from MTA.