UK Manufacturing Growth Slows More than Expected

The S&P Global UK Manufacturing PMI posted 52.5 in June, down from May's four-year high of 53.9 and the earlier flash estimate of 53.1. Factory production accelerated to a 21-month high, driven by robust domestic sales and export gains from China, the US, and the EU, though growth opportunities in the Middle East stalled due to regional conflict. However, new order inflows decelerated to their weakest pace since December 2025. Employment rose modestly for a third month as rising input costs and market uncertainty forced some firms to freeze headcounts. Meanwhile, severe global shipping delays and material shortages substantially lengthened supplier delivery times and drove up input prices, prompting manufacturers to raise output charges at a pace near May's four-year high. Looking ahead, business confidence remained tepid, with 48% of firms anticipating growth from new tech and AI against broader policy concerns.

The UK Manufacturing PMI eased to 53.1 in June 2026, a three-month low and below expectations of 53.8, compared with 53.9 in May, flash data showed. Despite the decline, manufacturing output improved, with the index rising to 53.6, its highest level in 21 months, from 52.2 previously. The increase was supported by a temporary boost from customer stockpiling as businesses prepared for potential price increases. However, the slowdown in new order growth to a six-month low suggested that this demand boost may be fading. Manufacturing employment increased, although some firms said recent hiring was mainly a short-term response to stronger order books. Input price pressures eased, while higher selling prices largely reflected the pass-through of increased costs to customers. Supply chain conditions deteriorated again, with more manufacturers reporting longer delivery times than improvements, although the pace of disruption was the weakest in three months.

The S&P Global UK Manufacturing PMI rose to 53.9 in May 2026 compared with initial estimates and April’s 53.7, marking the strongest expansion since May 2022. Output grew at a three-month high, led by intermediate and investment goods, while new orders rose for a sixth straight month on stronger domestic and export demand. However, momentum showed signs of fragility as firms reported front-loading of orders amid concerns over future price rises and supply disruptions. Supply chains remained under pressure, with vendor delivery times lengthening sharply due to shipping delays and geopolitical tensions affecting key routes. Purchasing increased for a second month, lifting input stocks at the fastest pace since July 2022. Input cost inflation climbed to a near four-year high, driven by higher energy, metals, chemicals, alongside tariffs, taxes, and labour costs. Selling prices rose at the quickest rate since mid-2022. Looking ahead, business confidence improved to a three-month high.