UK manufacturing output rose for the second successive month in November, as the recent downturn in new business intakes halted. Survey data indicated improved domestic demand and a softer contraction in export work.
The seasonally adjusted S&P Global UK Manufacturing PMI rose to 50.2, the first reading above 50.0 since September 2024. The survey ran 12–25 November, closing before the Chancellor’s Budget on 26 November.
Two PMI components (output and suppliers’ delivery times) signalled improved operating conditions. Stocks of purchases and employment registered contractions; new orders were unchanged. Output recorded back‑to‑back expansions for the first time since late 2024, driven by investment goods. Consumer and intermediate goods contracted. Only large firms saw production grow.
New business stabilised after 13 months of contraction. Domestic sales improved. Export contraction eased to a 12‑month low, though foreign demand fell for the 46th month, with lower orders from the US, EU, China and Brazil.
Business optimism rose to a nine‑month high, with 56% expecting higher output in a year (vs 11% forecasting decline). The new‑orders‑to‑inventory ratio hit a five‑month high. Sentiment was supported by hopes of market stabilisation, company expansion plans, new product launches and increased use of AI and data‑centre investments. Concerns remained around government policy, trade uncertainty, high costs and weak client confidence.
Manufacturing employment fell for the 13th month due to cost‑cutting, non‑replacement of leavers, redundancies and hiring freezes. Higher hiring costs (NMW and NICs) and Budget uncertainty were noted. Capacity remained underutilised as backlogs fell at the fastest pace since April.
Supply chains weakened, with vendor performance deteriorating to the worst level in almost a year due to capacity issues, shortages, transport disruption and customs delays.
Factory gate prices fell for the first time in two years amid weak demand, client pressure for discounts and competitiveness efforts. Input price inflation eased for the third month, with the slowest cost increase since October 2024.
Rob Dobson, Director at S&P Global Market Intelligence, commented: “November saw further signs of recovery in the UK manufacturing sector. The headline PMI is back in growth territory for the first time in over a year, with output up for a second month and the trend in new business stabilising following 13-months of continual decline. Business optimism has also continued its recovery, rising to a nine-month high.
“The numbers are especially encouraging as this improvement occurred despite November seeing elevated levels of business uncertainty, and in some cases an element of gloom, ahead of the Autumn Budget.
“The lifting of this uncertainty caused by the long lead-in to the Chancellor’s budget announcement should hopefully provide a boost in December, but it will be interesting to see the extent to which business might react to the absence of any significant growth-promoting measures. After all, despite the improvement in the performance of the manufacturing sector, any growth is still worryingly weak.
“Rising competitive pressures and slower cost inflation meanwhile led to factory gate prices being cut for the first time in over two years. This combination of soft industrial performance and subsiding price pressures will add to the shift in policy debate away from inflation fears towards supporting economic growth.”
Dave Atkinson, UK Head of Manufacturing at Lloyds, said of the UK Manufacturing PMI: “Today’s figures signal a return to growth and a welcome year-end boost for manufacturers.
“As we approach 2026, manufacturers are focused on driving productivity and competitiveness while investing for growth. In shaping their plans, firms will be considering how initiatives such as the Industrial Strategy, investment incentives, and skills funding can support their ambitions.”
Read other recent UK Manufacturing news: https://uk-manufacturing-online.co.uk/category/news/
