Growth in the UK's manufacturing sector accelerated last month, with export sales rising for the first time in four years, according to new survey data. The S&P Global UK manufacturing PMI survey recorded a reading of 51.8 in January, up from 50.6 in December, marking the highest score since August 2024 and exceeding earlier estimates.
Any reading above 50 indicates expansion, and the latest figure reflects the fourth consecutive month of rising output. The improvement was driven by stronger export sales, stable domestic demand, and restocking by customers. New export orders increased for the first time in four years, with higher sales to Europe, the US, China, and several emerging markets.
However, the survey revealed that growth was concentrated among larger manufacturers, while output from small and medium-sized enterprises (SMEs) declined for the third month in a row. Rob Dobson, director at S&P Global Market Intelligence, noted that the sector showed “encouraging resilience” despite rising geopolitical tensions, and business confidence rose to its highest level since before the 2024 autumn budget.
Dobson added that although staffing levels were reduced for the 15th consecutive month in January, the rate of job cuts slowed to its weakest since the cycle began. He warned that cost pressures are increasing due to the higher minimum wage, employer national insurance contributions, and rising commodity costs such as metals.
Fhaheen Khan, senior economist at Make UK, said manufacturing activity is finally moving at a pace that matches its optimism, but expressed concern that cost-cutting measures are favouring job losses. Mike Thornton of RSM UK highlighted that despite trade uncertainty, manufacturers are maximising new trade opportunities, and if export demand continues and tariff risks ease, 2026 could unlock real growth.
