Manufacturers in the West Midlands are shifting strategies ahead of 2026, prioritising ESG compliance, automation, and financial resilience amid evolving regulatory and geopolitical challenges, supported by regional investments in technology and infrastructure.
According to the report by business advisory firm FRP, more than a quarter (29%) of senior decision-makers in West Midlands manufacturing expect their boards to centre on environmental, social and corporate gover...
Continue Reading This Article
Enjoy this article as well as all of our content, including reports, news, tips and more.
By registering or signing into your SRM Today account, you agree to SRM Today's Terms of Use and consent to the processing of your personal information as described in our Privacy Policy.
nance (ESG) compliance and cashflow management in 2026. The Manufacturing Agenda survey also found that 28% of respondents plan to prioritise managing cashflow or working capital pressure, while 27% will focus on navigating new regulatory risks and 27% on geopolitical risks.
FRP said the shift in priorities follows a year in which manufacturers were most concerned with managing geopolitical friction or trade changes (34%), margin squeezes or unplanned cost spikes (32%), and the sudden loss of key orders or customers (29%). Reflecting those operational aims, companies in the region are planning fresh investments that address skills and talent shortages (41%) and support sustainability, ESG compliance or decarbonisation efforts (36%). FRP added that lenders and investors share many of the same focus areas for 2026.
When asked what would prompt them to intervene in a portfolio company over the next 12 months, lenders and investors cited cost, cashflow and working capital (44%), investment in automation and digital execution (41%), and leadership resilience (37%). Raj Mittal, restructuring advisory partner at FRP in Birmingham, said: “West Midlands manufacturing management teams are gearing up to tackle major, structural challenges, like ESG compliance, that will help them build lasting value.
“This reflects the fact that manufacturing resilience is no longer purely defined by financial strength – it’s about the ability to identify and proactively meet capability gaps and staying abreast of ever-evolving regulation.
“As firms enter the new year, it will be important they keep considering the lender perspective and seek the right advisory support to help bridge any gaps.
“Firms’ attention to working capital and cashflow will be a very good thing from a lender perspective and will help unlock further financial backing to support manufacturers’ ambitious growth plans.”
The FRP findings sit alongside wider evidence of a region leaning into technology and skills as routes to resilience. Research from Lloyds’ Business Barometer shows 41% of West Midlands businesses plan to invest in new technology in 2026, up markedly from 28% a year earlier, with substantial shares also earmarking spending for staff training (33%) and research and development (29%). Lloyds’ data highlights upskilling and enhanced technological capability as central to growth strategies.
Regional developments reported in West Midlands Insights on Society and Economy (WISE) newsletters underscore the broader economic backdrop. Recent items include new commercial and training infrastructure, such as the School of Coding & AI’s £2.5 million facilities in Birmingham, and corporate expansions and funding deals. The WISE briefings noted manufacturing-related investments and acquisitions, including a seven-figure HSBC funding package supporting S&S Steelstock’s acquisition that aims to double revenues, and business expansion by ARB UK Truckman. The Economist Intelligence Unit’s West Midlands Monitor also highlighted major energy and manufacturing projects, including a £45m-plus financing package to build a 99MW battery energy storage system in the region.
Technology deployments already underway point to how manufacturers might pursue the FRP agenda. The West Midlands has seen advanced industrial connectivity rollouts, notably Jaguar Land Rover’s Solihull site deploying a private 5G retrofit for large-scale manufacturing, intended to enable real-time data transmission and more automated, responsive operations. Separately, infrastructure projects such as the completed £32.9 million Urban 8 Logistics Park in King’s Norton are reshaping supply-chain capacity and local employment, which may help firms manage order volatility and distribution costs.
Taken together, the data and regional developments suggest manufacturers are aligning three interlocking priorities for 2026: tightening cashflow and working capital discipline to satisfy lenders; investing in automation, digital capability and skills to raise productivity and resilience; and accelerating ESG and decarbonisation programmes to meet regulatory and investor expectations. FRP warned that success will depend not only on capital but on leadership and advisory support to bridge capability gaps.
Industry observers say the confluence of these trends leaves little room for piecemeal responses. According to Lloyds’ business survey, firms that combine technology investment with targeted training are more likely to capture efficiency gains and secure external capital. Meanwhile, the WISE and Economist Intelligence Unit reports indicate that public‑ and private‑sector investments in infrastructure and energy are creating opportunities, but also raising the bar on compliance and strategic planning for manufacturers seeking to scale.
For West Midlands manufacturers, then, 2026 looks set to be a year of managed transformation: balancing near‑term liquidity and working capital pressures with longer‑term bets on skills, digitalisation and sustainability to maintain competitiveness and access to finance.
Source: Noah Wire Services
