UK Factory Sector Returns to Growth, Marking 14-Month High in November

Manufacturing Sector Edges into Expansion

The United Kingdom's manufacturing sector experienced a return to growth in November 2025, marking the first expansion in over a year. The latest S&P Global/CIPS UK Manufacturing Purchasing Managers' Index (PMI) registered 50.2, an increase from 49.7 in October. This figure represents a 14-month high and is the first time the index has risen above the crucial 50.0 threshold, which separates growth from contraction, since September 2024. The data, compiled by S&P Global/CIPS, was collected between November 12 and 25, 2025, and the final reading was confirmed on December 1, 2025.

Key Drivers and Lingering Weaknesses

The modest upturn in the sector was primarily supported by a second consecutive month of output expansion and a stabilization in new orders. Domestic demand showed improvement, contributing to the rise in new business after a 13-month sequence of contraction. However, the recovery was not uniform across all areas. Export orders continued their decline for the 46th consecutive month, although the rate of contraction eased to a 12-month low. Manufacturers reported lower intakes of new business from clients in the US, EU, China, and Brazil. Production gains were predominantly observed in large firms and the investment goods sector, while the consumer and intermediate goods industries continued to see contractions in output volumes.

Employment Trends and Price Dynamics

Despite the overall growth, employment in the manufacturing sector continued its downward trend, registering job losses for the 13th month running. This was attributed by survey respondents to cost-saving measures, the non-replacement of departing staff, and recruitment freezes. On the pricing front, input cost inflation eased to its slowest pace since October 2024. Furthermore, factory gate prices fell for the first time in over two years, indicating subsiding price pressures within the industry.

Business Optimism on the Rise

Looking ahead, business optimism within the UK manufacturing sector improved, reaching a nine-month high. Approximately 56% of manufacturers anticipate higher output over the next year. This positive sentiment emerged despite elevated levels of business uncertainty in the lead-up to the Chancellor's Autumn Budget, which was announced on November 26. Analysts suggest that the lifting of this uncertainty could provide a further boost in December, though the overall growth remains modest.