Aberdeen has been identified as one of the UK’s most challenging locations for manufacturing growth, according to new research from steelwork manufacturer Tadweld.
The company’s inaugural Tadweld UK Manufacturing Index 2026 ranked Aberdeen among the five most challenging cities for manufacturers alongside London, Cambridge, Oxford and Brighton.
While cities such as Manchester, Sheffield and Birmingham continue to attract investment, skilled workers and manufacturing expansion, Aberdeen faces a unique set of challenges linked to its historic dependence on the oil and gas sector and the ongoing transition towards renewable energy.
The Tadweld study assessed cities across seven key factors, including manufacturer survival rates, business growth, workforce availability, industrial investment, transport connectivity, industrial property affordability and access to business support programmes.
How Aberdeen compares
Manchester topped the rankings with a Manufacturing Index Score of 9.1 out of 10, followed by Sheffield (9.0), Birmingham and the West Midlands (8.9), Liverpool (8.8) and Wrexham/Flintshire (8.8).
These cities performed strongly due to a combination of sustained manufacturing investment, workforce availability, established supply chains and evidence of long-term business success.
Aberdeen, by contrast, scored lower due to uncertainty surrounding future industrial demand, workforce transition challenges and concerns around the pace of investment replacing traditional oil and gas activity. Recent industry reports have highlighted how manufacturers in the region are facing declining order books, operational cost pressures and an uneven transition from traditional energy sectors to emerging clean energy opportunities.
Several Aberdeen manufacturers have publicly warned that the region risks losing engineering capability if businesses and skilled workers continue to seek opportunities elsewhere while renewable projects take longer than expected to materialise.
The findings come amid wider concerns about the outlook for UK manufacturing.
Recent industry surveys have warned that high energy costs, inflationary pressures and increased operating expenses are making it more difficult for manufacturers to invest, recruit and grow.
Chris Houston, Managing Director at Tadweld, said:
“Aberdeen’s position in our Manufacturing Challenge Index isn’t a reflection of a lack of engineering expertise or industrial capability. In fact, the city has one of the strongest engineering heritages anywhere in the UK.
“The challenge is that Aberdeen is navigating a major economic transition at a time when manufacturers across the country are already facing significant cost pressures.
“Taxation is a necessary part of funding public services, and businesses recognise that responsibility. But when you examine the numbers in detail, the scale of contribution from a single SME is significant. One company employing 50 people generates over £1 million a year for HMRC, it’s a very meaningful fiscal footprint.
“The government rightly wants businesses to invest, innovate and create jobs. But every increase in business costs reduces the amount manufacturers can put back into apprenticeships, automation, machinery and productivity improvements.
“Cities such as Aberdeen face an additional challenge because many manufacturers have historically relied on the oil and gas supply chain. As that market evolves, businesses need certainty, investment and long-term opportunities to justify future expansion.
“That’s why it’s important to recognise the manufacturers that continue to operate, invest and employ people in these regions. Succeeding as a manufacturer in 2026 is difficult enough without the added pressures of industrial transition, and many businesses deserve enormous credit for continuing to keep their heads above water.”
Despite the challenges, Aberdeen continues to attract investment aimed at supporting the transition to new manufacturing sectors.
Projects such as the £9.1 million EnergyWorks facility and wider Energy Transition Zone initiatives are designed to support advanced manufacturing, clean energy technologies and supply chain diversification across the region. Industry leaders have also highlighted Aberdeen’s highly skilled workforce and engineering expertise as key strengths that could support future growth if investment and policy certainty continue to improve.
Houston added:
“Aberdeen’s future manufacturing success will depend on how effectively the region can translate its world-class engineering skills into new sectors. The talent is there, the infrastructure is there and the ambition is there. The challenge is ensuring the pace of investment and project delivery matches the scale of the transition taking place.”
In Case You Missed it:
The Tadweld UK Manufacturing Index 2026 analysed major UK manufacturing locations using seven weighted indicators: manufacturer survival rates (25%), new manufacturing business growth (20%), workforce availability (15%), industrial investment (15%), transport and logistics connectivity (10%), industrial property affordability and availability (10%), and access to grants and business support programmes (5%).
For the full study, visit: https://tadweld.co.uk/tadweld-uk-manufacturing-index-2026/
The study combines data from the Office for National Statistics (ONS), Companies House, Department for Business and Trade, Make UK, regional combined authorities, commercial property market reports, and manufacturing industry bodies to assess the UK’s most competitive manufacturing locations based on growth, resilience, investment, workforce availability, logistics connectivity and long-term business sustainability.
