The UK's manufacturing sector has shown a significant acceleration in growth during January, with export sales rising for the first time in four years according to new survey data. This positive development comes amid improved demand from key international markets including the United States and China.
PMI Survey Reveals Strong Performance
The closely-watched S&P Global UK manufacturing Purchasing Managers' Index (PMI) survey recorded a reading of 51.8 in January, marking an increase from 50.6 in December. This represents the highest score since August 2024 and exceeded earlier estimates for the sector's performance.
Any reading above 50 indicates that manufacturing activity is expanding, while scores below this threshold signal contraction. The January figure therefore confirms a clear expansion in UK manufacturing output.
Export Revival and Production Growth
Manufacturing output increased for the fourth consecutive month, with last month's acceleration attributed to several key factors. These include improved export sales, generally stable domestic market conditions within the UK, and a boost from customers choosing to rebuild their inventories.
The level of new export orders rose for the first time in four years, lifting the sector out of a prolonged slump. This export revival was driven by higher sales to Europe, the United States, China, and several emerging markets.
Divergence Between Large and Small Manufacturers
However, the PMI survey revealed an important divergence within the sector. While overall production growth was positive, this was primarily driven by larger manufacturers. Output among small and medium-sized enterprises (SMEs) actually declined for the third consecutive month, highlighting the uneven nature of the recovery.
Industry Analysis and Expert Commentary
Rob Dobson, director at S&P Global Market Intelligence, commented: "UK manufacturing made a solid start to 2026, showing encouraging resilience in the face of rising geopolitical tensions. There was also a positive bounceback in business confidence, which rose to its highest level since before the 2024 autumn budget."
Dobson noted that manufacturers are focusing on opportunities ahead despite persistent concerns about the geopolitical environment, government policy, and tariff tensions. He also highlighted that while staffing levels were reduced for the fifteenth consecutive month in January, the rate of job cutting slowed to its weakest since this cycle began.
Cost Pressures and Policy Environment
"Cost pressures are creeping higher though," Dobson added, "as the pass through of the increased Minimum Wage and employer national insurance contributions continue to work through the supply chain alongside the rising costs for commodities such as metals."
Fhaheen Khan, senior economist at industry group Make UK, observed: "Manufacturing activity is finally moving at a pace deemed worthy of its optimism, taking advantage of the much needed stability in the policy environment since the budget. Until recently, many businesses had paused investment due to cost uncertainty."
Khan expressed concern that cost-cutting measures are favouring job losses, which could create new challenges for the government.
Trade Opportunities and Future Outlook
Mike Thornton, head of industrials at RSM UK, noted: "2025 saw trade uncertainty, but despite tariff and geopolitical risks, UK manufacturers are maximising new trade opportunities. If export demand continues, if we see no more tariff changes and if the Industrial Strategy clarity boosts investment, then 2026 could unlock real growth for UK manufacturing."
The reference to Labour's Industrial Strategy highlights the government's long-term plan to boost investment and productivity across key industries including manufacturing. This policy framework appears to be contributing to the improved business confidence noted in the survey.
The January PMI data suggests that UK manufacturing is beginning 2026 on a stronger footing than anticipated, with the export revival representing a particularly encouraging development after four years of stagnation in international orders.
