2 godzin temu
UK manufacturing expanded at its fastest pace in 15 months in December, with activity rising to a Purchasing Managers' Index (PMI) reading of 50.6, up from 50.2 in November. The growth came as uncertainty from the autumn Budget, tariff concerns and the major Jaguar Land Rover cyber attack eased.
Manufacturing output increased for the third consecutive month. New orders rose for the first time since September 2024. Domestic demand drove the rise in new orders. Any reading above 50.0 indicates growth in activity.
The S&P Global UK manufacturing PMI survey showed manufacturers benefited from reduced headwinds. Rob Dobson, director at S&P Global Market Intelligence, said: "UK manufacturers benefited from several reduced headwinds towards the end of the year, as the negative impacts of the uncertainty surrounding the autumn Budget, tariffs and the JLR cyber attack all moderated."
Temporary factors ease
The recovery may prove temporary. Dobson warned: "The start of 2026 will show if growth can be sustained after these temporary boosts subside." He noted that drivers of growth need to "shift more towards rising demand".
Some businesses in supply chains affected by Jaguar Land Rover production shutdowns saw conditions improve as the year ended. The British carmaker suffered a cyber attack in late August that impacted overall motor manufacturing in September.
Employment concerns persist
Employment in the sector fell for the 14th month in a row, though at the slowest rate since job cuts began. Chris Barlow, head of manufacturing at accountancy and advisory firm MHA, said clients expect continued slower hiring in 2026, "instead looking to find ways to work more efficiently, often by automating or improving their processes".
He pointed to government measures affecting hiring decisions: "Government measures, such as the confirmed increase to the minimum wage, alongside the impact of the salary sacrifice cap, are making businesses cautious about hiring new staff."
Export picture remains weak
New export business has contracted for almost four consecutive years. However, UK firms observed signs of recovery in export demand from the US, Asia-Pacific and Middle East regions in December. Dobson noted: "The domestic market remained a positive spur to growth, while new export business, despite having now fallen for almost four consecutive years, took a sizeable stride towards stabilising."
Barlow described improving UK demand as "vital for manufacturing's prospects in 2026 given the path ahead for global trade is not expected to get any easier".
Note: This article was created with Artificial Intelligence (AI).
