UK Manufacturing PMI Hits 15-Month High, Inflation Pressures Rise

URGENT UPDATE: The UK’s December 2025 Manufacturing PMI has been confirmed at 50.6, slightly down from the preliminary reading of 51.2, but still reflecting a significant improvement over November. This data, released by S&P Global, marks the highest level in 15 months as the UK manufacturing sector shows signs of recovery heading into the new year.

Despite the downward revision, the latest figures indicate a positive trend, with both output and new orders nudging higher. This uptick is crucial as it signals ongoing growth in the manufacturing sector, suggesting that recovery efforts are beginning to bear fruit. The report highlights a third consecutive month of rising output and a modest improvement in new order intakes for the first time since September 2024.

However, the report also reveals a concerning rise in price pressures. Input cost inflation has accelerated, leading to increased output charges after a period of decline in November.

“Further signs of growth emanated from the UK manufacturing sector before the turn of the year,”

S&P Global stated, emphasizing the domestic market’s role as a positive spur for growth.

The UK manufacturing landscape has faced several challenges over the past year, including uncertainty surrounding the Autumn Budget, tariffs, and a recent cyber-attack on Jaguar Land Rover. Thankfully, these headwinds have moderated, allowing manufacturers to benefit from a more stable operating environment as the year closes.

Looking ahead, the key question is whether this growth can be sustained as we enter 2026. The upcoming months will be critical in determining if the recovery is based on genuine demand rather than merely inventory adjustments and backlog clearances. The recent interest rate cut in December is expected to encourage spending and investment among manufacturers and their customers, providing a boost to the sector.

Despite the positive signs, business optimism has taken a hit, falling for the first time in three months in December. This uncertainty could impact future growth trajectories, underscoring the need for a more robust foundation built on increasing demand.

As the UK manufacturing sector navigates these mixed signals, all eyes will be on the developments in early 2026. The immediate future will reveal whether these positive trends can translate into sustainable growth or if manufacturers will face renewed challenges as temporary boosts fade. Stay tuned for further updates as this story develops.