UK manufacturing production grows as expected in October - PMI

Activity in UK manufacturing rose at a faster pace last month than the month before, with the outlook improving to an eight-month record, survey results from S&P Global showed on Monday.

The seasonally adjusted manufacturing purchasing managers' index stayed above the 50-point neutral mark separating growth from contraction, rising to a five-month high of 52.8 points in October, in line with the flash estimate and up from 51.9 in September.

"UK manufacturing showed resilience in the lead up to the Autumn budget," commented S&P Global Market Intelligence Director Rob Dobson. "Rates of growth in output and new orders both gathered pace in October, as companies responded to signs of improving demand in both domestic and overseas markets, including new work received from mainland China, the EU and the US.

"Concerns about possible policy changes filtered through to the labour market, however, with the upturn in employee numbers halting following a six-month sequence of increased hirings. The remainder of 2026 will see if the confirmed rise in the minimum wage for next year will continue to weigh on employment trends.

"Rising labour costs are also coming at a time when the cost environment is already generally high. As well as higher wage costs, manufacturers are being buffeted by rising fuel, energy and transportation costs as supply chain shocks and delays continued to drive up inflationary pressures. Input prices consequently rose to one of the greatest extents in the past four years in October which, alongside the signs of resilience in the manufacturing sector, will further shorten the odds of interest rate hikes to come from the Bank of England."

Looking ahead, S&P Global said UK business optimism reached an eight-month high in October, with manufacturers citing "planned business expansions, signs of market recovery, spending on capital equipment and AI (including data centres), new product launches and better order pipelines."

However, it noted that several survey respondents expressed concerns about high costs and possible government policy changes.

The PMI is compiled by S&P Global from responses to questionnaires sent to purchasing managers in a panel of around 650 manufacturers in the UK. October's data was collected between October 12 and Tuesday last week, ahead of the UK autumn government budget statement on Wednesday last week.

Services sector and composite PMI readings are due out on Wednesday this week.

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