UK Manufacturing Sector Records Strongest Growth in 17 Months During January

Manufacturing Activity Reaches 17-Month High

The United Kingdom's manufacturing sector experienced a robust start to 2026, with activity expanding at its fastest rate in 17 months. The S&P Global UK Manufacturing Purchasing Managers' Index (PMI) climbed to 51.8 in January, a notable increase from 50.6 recorded in December. This figure surpasses the critical 50.0 threshold, indicating growth within the sector and marking the strongest improvement in business conditions since August 2024.

Rob Dobson, Director at S&P Global Market Intelligence, commented that 'UK manufacturing made a solid start to 2026, showing encouraging resilience in the face of rising geopolitical tensions.'

Surge in Export Orders and Production

A significant driver of this acceleration was a substantial increase in new export orders, which rose for the first time in four years. Manufacturers reported stronger sales to key international markets, including Europe, the United States, and China, alongside other emerging economies. The new orders sub-index specifically jumped to 53.2.

In addition to export growth, manufacturing output expanded for the fourth consecutive month. This sustained increase matches the joint-quickest growth rate observed since September 2024, reflecting a broader resilience in the sector.

Business Confidence and Employment Trends

The positive momentum in January also led to a significant rebound in business confidence. Optimism among manufacturers reached its highest level since before the 2024 Autumn budget, with many focusing on future growth opportunities despite ongoing geopolitical uncertainties.

While employment levels in the manufacturing sector continued to decline, the rate of job losses was the weakest recorded since the start of the 15-month sequence of reductions. This suggests a potential stabilization in the manufacturing labor market. However, businesses continued to face rising input costs, with the increase in business input costs reaching its highest point since August 2025.