Many are also planning fresh investments for the year ahead, according to the report by advisory firm FRP
South West manufacturers are preparing to bring their businesses to market in 2026, according to a new report.
Of the region’s manufacturing senior decision makers polled for FRP’s ‘The Manufacturing Agenda’, nearly two in five (38%) said they expected their boards to be leading sell-side M&A over the next 12 months.
To bolster operations, manufacturers are also planning fresh investments for the year ahead, focusing on boosting digital or automation capabilities (49%), addressing skill and talent needs (48%) and supporting buy-side M&A (47%).
Boards will also be prioritising managing cashflow or working capital pressure (36%) and sustainability, ESG compliance or decarbonisation efforts (35%).
It follows a year where manufacturers have been focused on managing supply chain disruption, margin squeezes and unplanned cost spikes, and ESG regulation.
The report found that lenders and investors share many of the same 2026 focus areas as boards.
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, automation and digital execution (41%) and leadership resilience (37%).
Matt Whitchurch, financial advisory partner at FRP in Bristol, said: “The focus on major strategic steps, such as joining together with other firms through sell-side M&A, reflects the fact that manufacturing resilience is no longer purely defined by financial strength – it’s about anticipating and addressing capability gaps.
“Next year, many South West manufacturers will be seeking new funding to support their strategies and investment ambitions, and it’s encouraging to see broad alignment between board and lender priorities.
“Boards that understand that lenders are firmly focused on operational fundamentals like cashflow, and that have the right advisory support in place, will be in the best position to build compelling cases for new or further investment.”
