Solid start to 2026 for subcontract market
Published: | Subcontract
- Market up 8 percent on the final quarter of 2025
- Global issues starting to impact activity
The UK contract manufacturing market was fundamentally solid in the first quarter of 2026, showing healthy growth compared to the previous quarter, according to the latest Contract Manufacturing Index (CMI) figures, but is seeing the effects of global events.
The CMI stood at 75 for the quarter, up 8 percent on the final quarter of 2025. It showed solid month on month growth from January onwards, but by the end March supplier quoting activity was down 30 percent and lead times had drifted out by 30 percent as the crisis in the Middle East started to affect prices and supply chains.
The CMI is produced by sourcing specialist Qimtek and reflects the total purchasing budget for outsourced manufacturing of companies looking to place business in any given month. This represents a sample of over 4,000 companies who could be placing business that together have a purchasing budget of more than £3.4bn and a supplier base of over 7,000 companies with a verified turnover in excess of £25bn.
The baseline for the index is 100, which represents the average size of the subcontract manufacturing market between 2014 and 2018.
Compared to 12 months ago, when the CMI was 64 it has increased by 17 percent, but it is still slightly down on where it was two years ago.
On a process-by-process basis, machining represented 45 percent of the market, unchanged from the previous quarter. Fabrication rose from 42 percent to 47 percent of the market at the expense of other processes such as moulding and electronic assembly.
Looking at the market by sector, the two top spots were the same as in the previous quarter – Industrial Machinery followed by Construction. Although within that the volume of Construction work was up 50 percent on the previous quarter. The next three sectors were Heavy Vehicles/Construction Equipment, Agriculture and Pump and Valve. Pump and Valve was up significantly having been in 20th position in the previous quarter.
Commenting on the figures, Qimtek owner Karl Wigart said: “It was good to see a pretty solid start to the year with good activity from both buyers and suppliers. Then, geopolitics had a real impact on the last month of the quarter, with supplier quoting activity dropping 30 percent and lead times increasing by 30 percent. With fewer quotes going out it is not a good omen for the level of activity in the coming months, and longer delivery times are an indicator of supply chain disruption.”
