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Average sales revenue stood at £151,503 – down 46% compared to the last quarter, and 58% YoY
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Purchasing dropped by 60% QoQ and 66% YoY
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Stock on hand rose by 36% QoQ to £235,258 and 6% YoY
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Profitability (GMP) stood at 33% – down from 41% QoQ and 39% YoY
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Lead times dropped to 13 days from 18 in Q4 2025
Electrical component manufacturers have been hit by a sharp decline in sales, according to new research – reflecting a drop in business confidence due to the war in Iran.
Small and mid-sized firms in the category saw their average sales revenue fall by 46% in the first quarter of the year, compared to a 39% drop across all manufacturing categories.
Average sales revenue only reached £151,503 – in contrast to the previous quarter when it stood at £281,489. It was also down 58% year-on-year. The sector saw a steeper decline than electronics and telecommunications manufacturers, whose quarterly sales revenue fell by 21% to £358,148.
The figures appear in the latest manufacturing report from inventory management specialist Unleashed, an inventory management software platform popular with small and mid-sized manufacturers, wholesalers and distributors. Its quarterly report is based on data from more than 600 UK firms using the software, across 12 manufacturing categories such as food and drink, clothing and fashion, and construction.
Electrical component manufacturers ranked 10th out of the 12 categories analysed.
Manufacturers in the furnishings category fared worst, with revenue plunging by 61% from £239,280 to just £92,410. Construction industry suppliers were next, seeing their revenue falling by more than half (57%) from £486,638 to £209,662.
Weak sales were compounded by a contraction in purchasing and stock on hand across all manufacturing categories QoQ, suggesting that buyers are increasingly cautious about the months ahead.
The value of purchase orders (POs) was down by an average of 60%. Similarly, profitability was down from 41% to 33% – the lowest since Q4 of 2024. Stock on hand also rose by around 36% to £235,258, while lead times dropped from 18 to 13 days in the first quarter of the year.
Commenting on the figures, Joe Llewellyn, GM of ERP Small Business at The Access Group, the parent company of Unleashed, said:
“Tensions in the Middle East, including the Strait of Hormuz blockade, have created significant market uncertainty – and our data suggests this is now taking its toll on manufacturers. Having started the year on a growth footing, the first quarter of the year saw the biggest drop in sales revenue we’ve recorded since 2024. With fuel prices already up, and energy prices expected to rise later this year, the coming months could reduce confidence, increase costs, and squeeze margins even more. While many SMEs have slim buffers to weather these changes, our data suggests they’re taking steps to mitigate the impact by reducing stock on hand to protect their margins.”
View the full Unleashed Manufacturing Health Index report.
