UK Manufacturing Growth Slows to 5-Month Low

The UK Manufacturing PMI eased to 51.5 in August 2026, the lowest level in five months, from 51.9 in July, flash data showed. Manufacturing output growth slowed to a marginal pace as precautionary stock-building cooled, while geopolitical uncertainty and elevated cost pressures constrained activity. Input cost inflation remained elevated, largely due to higher energy prices and supply disruptions linked to the Middle East conflict, pushing up fuel surcharges, transportation costs and raw material prices. Meanwhile, output price inflation remained below previous highs. Constrained budgets and elevated risk aversion continued to weigh on order books. However, business optimism improved, supported by hopes for a turnaround in broader economic conditions.

The S&P Global UK Manufacturing PMI eased to 51.9 in July 2026, a four-month low, from 52.5 in June and below the preliminary estimate of 52.8. Despite the decline, the index remained above the 50 mark for a ninth consecutive month, signaling continued expansion in the sector. Manufacturing output rose for a fourth straight month, accelerating to its fastest pace in nearly two years. New orders increased for an eighth consecutive month, while export sales grew for a seventh month. However, business optimism slipped to a three-month low as firms remained cautious about global trade tensions, tax changes, and regulatory uncertainty. Employment continued to rise but at the slowest pace of the current recovery, reflecting ongoing caution over hiring. Meanwhile, input cost and output price inflation eased further as supply chain pressures moderated, while purchasing activity and inventories declined amid softer demand for inputs and improved supplier delivery times.

The S&P Global Flash UK Manufacturing PMI increased to 52.8 in July 2026 from 52.5 in June, beating forecasts of 52. Goods producers recorded an expansion of production levels for the fourth month in a row in July. The rate of growth accelerated to its strongest since September 2024, attributed to generally improving market conditions and a subsequent strengthening of new order intakes. Also, manufacturers indicated a rise in unfinished work for the first time since April 2022 and there was a marginal increase in staffing levels. At the same time, softer cost pressures were observed. Some manufacturers noted instances of lower raw material prices and oil-related surcharges (especially for plastics). Manufacturers indicated the least marked downturn in supplier performance since February, despite many firms noting longer international shipping times.