The UK manufacturing sector sustained its upturn into February 2026, with companies across the country reporting rising new orders from both domestic and international markets, a sign of continued momentum in the industry’s recovery.
According to the S&P Global UK Manufacturing Purchasing Managers’ Index (PMI) — a key measure of activity — the index came in at 51.7 in February, only marginally below January’s 17-month high of 51.8 but comfortably above the 50.0 threshold that signals expansion. The reading marked the fourth consecutive month of growth in factory activity.
Rising Output Drives Momentum
Manufacturers reported that production expanded for the fifth month in succession, with the pace of output growth the strongest since September 2024. This was driven by higher intakes of new business and improving customer confidence, both at home and abroad.
Export demand was a standout feature of February’s survey, with manufacturers noting the quickest rise in overseas orders in four-and-a-half years. Reported growth came from markets including mainland China, the EU, the Middle East and North America, reflecting a broadening global appetite for British manufactured goods.
Among subsectors, consumer goods producers led the charge, reporting the strongest increases in output, new orders and export business. Intermediate and investment goods manufacturers also saw expansions, though small-scale firms continued to lag behind their larger peers in both production and order growth.
Optimism Balanced by Cost and Jobs Pressures
Sentiment in the sector remained optimistic, with nearly three-fifths of firms expecting output to rise over the coming year — a reflection of hopes built on new product launches, widening market access and planned investments in capacity and technology.
However, challenges persist. Employment in the sector continued to contract, with February marking the sixteenth straight month of job reductions — though the pace of decline was the mildest in that sequence, suggesting labour pressures may be easing.
Input costs also rose at their highest rate in six months, driven by expensive raw materials such as chemicals, energy, copper and electronic components, alongside rising labour costs following increases in the minimum wage and employer national insurance contributions. Many manufacturers passed parts of these cost increases on to customers through modest rises in output charges.
Outlook: Growth with Caution
Overall, the February data painted a picture of a resilient UK manufacturing sector: one that continues to expand output and secure new business, even as cost pressures and labour adjustments persist. Analysts suggest that the sustained momentum — particularly the strong export orders — may underpin further growth in the coming quarters, provided global demand remains robust and policy uncertainty does not dampen confidence.
This continuation of growth into early 2026 follows similar positive indicators from other economic surveys this year, which have pointed to ongoing expansion in both output and new orders since the start of the year.