How Yorkshire manufacturers are driving growth despite economic headwinds: David Atkinson
Manufacturing in Yorkshire and the Humber has always been defined by its ability to adapt.
Its expertise in heavy industry, advanced engineering, traditional craftsmanship and cutting-edge precision manufacturing, has allowed the region to continuously evolve. Today, that same adaptive spirit is proving critical as manufacturers navigate uncertainty, while positioning themselves for genuine, long-term growth.
That resilience is reflected in the latest Lloyds Business Barometer, which shows business confidence in Yorkshire holding steady at 42% in May, with optimism in the wider economy climbing two points to 28%. Encouragingly, 74% of Yorkshire firms cited stronger customer demand and expected new contracts as drivers of confidence in their own trading outlook, and almost half (46%) expect to increase staffing levels over the next year.
The regional backdrop is genuinely ambitious, particularly for SMEs and mid-market companies. The Hull and East Yorkshire Local Growth Plan positions the region at the forefront of the UK's industrial future, with the devolution deal delivering an extra £400m in funding over 30 years to drive growth.* Crucially, SMEs and mid-market companies are central to this vision, with regional clusters, innovation funds and targeted investment all designed to create opportunities across the supply chain.
For manufacturers already serving aerospace, precision engineering or advanced materials sectors, expanding into adjacent markets such as energy, clean technology and advanced manufacturing can be a natural next step.
At the same time, the Humber Freeport** has launched a £3 billion investment prospectus across approximately 600 hectares of development land, with the potential to create 5,000 jobs. Elsewhere, South Yorkshire is building on its innovation-led heritage*** through clusters like the Sheffield Innovation Spine, The Seam in Barnsley and the Advanced Manufacturing Park in Rotherham.
Together, these represent real, tangible opportunities for manufacturers willing to think strategically about where they position themselves.
Yorkshire manufacturers are already showing what's possible. Leeds-based Kingfisher Lubrication, a 150-year-old grease fittings manufacturer, has invested in a state-of-the-art Index MS 24 machine, supported by a £1 million funding package from Lloyds. This has allowed the company to cut energy costs per unit by up to 50% on certain products and dramatically reducing cycle times. The investment has enabled Kingfisher to scale and diversify while continuing to meet the high-quality standards expected by global clients like JCB and Scania.
But persistent cost pressures and the ongoing need to improve productivity continue to shape firms' plans for the future. For business leaders, the challenge lies in identifying where to focus their limited time and capital investment to deliver the greatest impact.
Manufacturers are increasingly exploring technologies that can help them work smarter and scale more effectively, with targeted investments in automation, digital systems and improved processes unlocking meaningful gains in efficiency, quality and capacity. The same shift is showing up in the national sector data, with more than two fifths of manufacturers nationally planning to invest in plant and machinery (41%) and AI and automation (46%) over the next year, a clear signal that the sector views technology investment as central to future competitiveness.
For many firms, the challenge is no longer whether to invest in technology, but how to ensure they have the right people and skills in place to maximise its potential. Manufacturing is evolving rapidly, with digital systems, automation and AI becoming increasingly embedded within day-to-day operations. While these technologies can unlock meaningful gains in productivity, quality and scalability, they also require a workforce equipped with the technical and digital capabilities needed to support modern manufacturing environments.
Developing a pipeline of skilled people must also remain a priority, particularly as the transformative implications of technologies including AI become ever more important. Recent Lloyds research found that 88% of Yorkshire and Humber businesses have a clear view of their biggest opportunities for growth, with workforce investment, new product development and entering new markets identified as leading growth drivers****. Looking ahead to the next six months, Yorkshire businesses identified investing in team training (52%), entering new markets (49%) and evolving their offering (37%) as their top target areas for growth. Against this backdrop, firms must invest in apprenticeships and training to ensure their teams have the advanced digital and technical skills needed for modern manufacturing.
While the opportunities for Yorkshire manufacturers are considerable, success will come from understanding existing strengths, having a clear vision of where you want to be, and making strategic investments that build toward that future.
The sector's long-term competitiveness hinges on this. Lloyds' relationship teams support manufacturers daily with finance and connections, backed by the bank’s £35 billion of new finance being made available in 2026 to support businesses operating and investing in the UK. Of this, £3 billion is available for Yorkshire and Humber firms. Alongside finance initiatives like ours, sustainable growth comes from having a capable, diverse workforce. That's why skills development must remain a priority, not just for individual businesses, but for UK manufacturing as a whole.
The path ahead will demand thought, effort and investment but the opportunities outweigh the risks. Yorkshire and the Humber has the regional strategy, the investment infrastructure and, crucially, the manufacturing heritage to lead. What matters now is sustained commitment to building the skilled workforce that will unlock it.
David Atkinson is head of manufacturing at Lloyds