UK manufacturing output expands for 1st time in 1 yr in Oct

UK manufacturing output expanded for the first time in a year in October, as companies depleted backlogs of work and increased stocks, according to purchasing managers’index (PMI) data.

The seasonally-adjusted S&P Global UK manufacturing PMI rose to a 12-month high of 49.7 in October, up from 46.2 in September.

Three of the PMI constituents—new orders, employment and stocks of purchases—registered contractions, while sub-indices for output and suppliers' delivery times were at levels consistent with improved operating conditions, S&P Global said in a release.

Sector data signalled that production volumes rose in the consumer and intermediate goods industries. Growth was stronger in the latter, partly reflecting a boost to some manufacturers, mainly those sensitive to the autos supply chain.

Although investment goods output contracted for the twelfth month om a row, the rate of decline was the weakest during that sequence.

Market conditions faced by manufacturers remained tough, however, with demand from both domestic and overseas markets decreasing during the latest survey month.

October 2025 saw total new business contract for the thirteenth successive month, albeit to a weaker extent than in the prior month. All three of the sectors covered by the survey saw new order intakes contract, with the steepest fall at investment goods producers and the slowest in the intermediate goods category.

The month saw the level of new export orders in the United Kingdom decline for the forty-fifth successive month, amid reports of weaker demand from the United States, the European Union (EU), Asia and the Middle East.

Weak global market conditions, ongoing tariff uncertainties and UK competitiveness issues were all mentioned as factors leading to reduced overseas demand.

Although business optimism climbed to an eight-month high, it remained below its long-run average. Over half of panellists expect their output to be higher one year from now, compared to 12 per cent forecasting contraction.

Positive sentiment was linked to economic recovery, efforts to regain market share, promotional activity and new product launches.

In contrast, tariff uncertainty, especially the effect on overseas client confidence, domestic fiscal policy concerns, a weak global economy and heightened geopolitical tensions all weighed on UK manufacturers' sentiment.

The month continued to see job losses. There were reports of natural attrition, hiring freezes, cost-control initiatives and difficulties finding appropriately skilled staff. The overall pace of job loss eased to its weakest during the current sequence of decline, with rates decelerating across the consumer, intermediate and investment goods industries.

Although October continued to see manufacturers report operating in a high-cost environment, there were further signs that purchase price inflationary pressure is easing.

Average input costs rose at the slowest pace so far in 2025, as decelerations in the consumer and intermediate goods industries offset steeper cost increases at investment goods producers.