UK Manufacturing Returns to Growth

The S&P Global UK Manufacturing PMI dropped to 51.0 in March of 2026 from 51.7 in the previous month, revised downwards from the preliminary estimate of 51.4 but remaining firmly above the initial market expectation of 50.1. The result reflected a degree of unexpected stability in manufacturing growth as the outbreak of war in the Middle East shocked global energy markets and hampered growth expectations among major energy importers. Manufacturing output decreased for the first time in six months as uncertainty drove firms to slow production volumes, but new orders and suppliers' delivery times were consistent with the improving trend in recent months. Still, average input costs surge the most since 2022 due to higher costs of oil, gas, and other operations impacted by commodity benchmarks, driving half of the companies surveyed to increase their selling charges. Looking forward, the rising uncertainty dented business optimism.

The S&P Global UK Manufacturing PMI eased to 51.4 in March 2026 from 51.7 in February, compared to expectations of a drop to 50.1, preliminary estimates showed. This marked the slowest pace of expansion in three months, as output growth slowed and goods producers cited the war in the Middle East as weighing on global demand. Around 25% of UK manufacturers reported longer supplier delivery times, the sharpest slowdown since July 2022. Extended shipping from Asia, rerouted via the Cape of Good Hope, and production stoppages at Middle East petrochemical suppliers contributed to delays. Supply chain pressures and weaker demand also reduced purchase stocks and moderately lowered post-production inventories. Meanwhile, input costs surged at the fastest rate since October 2022, and the largest monthly acceleration since October 1992, prompting output charges to rise at their steepest pace since April 2025.

The S&P Global UK Manufacturing PMI was revised slightly lower to 51.7 in February 2026 from a preliminary of 52, and compared to a 17-month high of 51.8 in January. The reading continued to point to expansion in the manufacturing sector, with output growth reaching the highest in 17 months. New orders, output and supplier delivery times saw levels consistent with improved operating conditions, while there were declines in employment and stocks of purchases. Meanwhile, the rate of input cost inflation accelerated for the third successive month to reach a six-month high. Increased purchase prices were linked to the rising costs for chemicals, copper, electronic components, energy, gold and silver. Supply chains remained stretched, with vendor lead times lengthening for the twenty-sixth month in a row. Finally, the outlook for the sector also remained relatively positive, with almost three-fifths of manufacturers expecting output to rise over the coming 12 months.