Energy sector confidence plunges as global conflict heats up
22 Mar 2026
Geopolitical uncertainty is undermining the UK energy sector’s strong performance over the last year, warns a new report.
Inventory management software company Unleashed’s Manufacturing Health Index Report recorded strong year on year sales provided a particular boost for energy manufacturers but a drop in business confidence.
Small and mid-sized firms generated £480,000 in the final quarter of 2025. While this actually represented a drop of 18% from the previous quarter it was more than double the previous YoY figure of £219,024, pointing to sustained SME growth.
YoY purchasing and stock on hand figures showed, however, that firms were not replenishing inventory to meet upcoming demand. Purchasing dropped 35% in the final quarter of last year, said the report.
This compared to the same period last year and 34% YoY, while stock on hand fell 17% and 11%.
Joe Llewellyn, general manager of ERP Small Business at The Access Group, the parent company of Unleashed, said:
“With its vulnerability to policy changes and market volatility, the energy sector has demonstrated its resilience year-on-year but our data suggests that confidence for the coming months is fragile.
“We don’t yet know what impact the global picture will have on manufacturers. We may see increases in energy prices, shortages in some materials, or disruption to shipping routes which increase lead times and costs. Smaller firms are most vulnerable to this kind of disruption – but they are also more agile and can respond faster to changing situations.”
NEWS: Make UK’s latest Manufacturing Outlook report revealed production edged up in the first quarter of 2026, after and end of 2025 slump.
The survey suggested manufacturing would grow 0.9% this year, after contracting by 0.2% in 2025. However, disruption to Gulf shipping could push energy prices even higher and cause more trouble for supply chains, it said.
