Production in the United Kingdom reaches a new growth level in 2026

The UK manufacturing sector shows a significant improvement, reaching activity levels in 2026 not seen since mid-last year. The PMI for this sector rose to 51.8, a clear jump from 50.6 recorded in December, confirming preliminary estimates of 51.6. This change reflects a rebuilding of confidence among manufacturers and signals the beginning of a more stable period for the industry.

Orders reach highest level in four years

This is especially evident in the dynamics of new orders, which jumped from 50.2 to an impressive 53.2 points. This result marks the highest index level since February 2022 and is mainly due to the resumption of growth in foreign demand. After nearly four years of stagnation, emerging export interest suggests that global market conditions are starting to favor UK producers. Rob Dobson, Chief Analyst at S&P Global Market Intelligence, emphasized: “UK manufacturing started 2026 on solid footing, demonstrating encouraging market resilience. The rise in business confidence is also significant, reaching the highest level since the autumn 2024 budget announcement.”

Business regains confidence, but costs remain a challenge

However, the improvement in activity will be accompanied by rising cost pressures. The input cost increase index has risen to its highest level since August 2025. This price pressure could pose a hurdle to profitability for manufacturing firms, especially if they are unable to pass increased costs onto consumers.

Employment awaiting stabilization

There are some optimistic signs in the labor market. Although employment in the manufacturing sector is still decreasing, the rate of decline has noticeably slowed. The current level of workforce reduction is the lowest since the payroll tax increase in October 2024, suggesting that manufacturers are becoming more cautious in their decisions to cut labor costs.

The report thus illustrates a complex situation: while a new level of orders and business confidence paint a more promising picture for UK manufacturing, producers must also contend with significant cost pressures that could impact their ability to expand operations.