UK health and medical equipment manufacturers have recorded a remarkable sales performance in the first quarter of 2025, defying broader SME business confidence trends and providing a timely boost to the country’s healthcare supply chain resilience.
New figures reveal that the average UK-based small-to-medium medical manufacturer saw a 42% increase in sales revenue in Q1 2025 compared to the final quarter of 2024, and a 41% rise year-on-year.
The findings, based on data from over 600 UK firms using Unleashed’s inventory management software, suggest that, despite continued economic uncertainty, the medical manufacturing sector remains robust and well-positioned to meet ongoing healthcare demands.
This contrasts with recent Q1 business confidence surveys, which showed overall SME confidence turning negative for the first time since 2022, amid tax rises, inflationary pressures, and global market instability.
Yet, the health and medical supplies sector posted not only standout sales figures but also a 12% increase in profitability compared to Q4 2024, as firms adapted to shifting market conditions and international disruptions.
Market factors supporting growth
According to Joe Llewellyn, GM of ERP Small Business at The Access Group, a combination of falling bank rates and tariff-related shifts in international procurement has delivered unexpected windfalls for UK medical manufacturers: “Some international buyers have turned to UK suppliers to avoid tariff complications, while others accelerated orders ahead of tariff changes. Combined with steadily improving financing conditions, this has created a stronger-than-expected start to the year for many manufacturers.”
Faster delivery times also contributed to improved operational efficiency, with average lead times dropping to 18 days, down from 21 days the previous quarter.
This allowed manufacturers to reorder in smaller, more manageable quantities, improving cash flow and gross margins.
Additionally, firms reduced excess stock holdings, while many chose to draw down inventory reserves rather than replenish at a time when weak GBP-USD exchange rates made international purchases more costly. As a result, Gross Margin Return on Inventory (GMROI) increased by 32% year-on-year, reaching £5.48 for every pound spent on stock.
Key Q1 2025 highlights – Health and medical equipment sector
Sector outlook
The continued strength of UK health and medical equipment manufacturers bodes well for the healthcare estate, procurement leaders, and NHS Trusts seeking to build greater resilience into their supply chains.
Shorter lead times and improved profitability within the sector could help stabilise pricing, enhance product availability, and reduce the need for extensive stockpiling — all of which are key operational priorities for healthcare providers in 2025.
Across all 12 manufacturing sectors analysed, health and medical equipment remained a standout performer, while categories like Electronics & Telecoms and Food saw notable declines in Q1.
As international market conditions remain volatile, the medical manufacturing sector’s strong start to 2025 offers a rare note of optimism for the wider UK healthcare infrastructure community.