UK manufacturing returns to growth in Nov as PMI hits 14-month high

The survey, conducted from November 12–25, showed mixed underlying conditions. Output expanded for a second month, though gains were narrow and led entirely by investment goods producers. Consumer and intermediate goods makers continued to contract, while only large manufacturers reported higher production as SMEs slipped back into decline.

New business stabilised after more than a year of contraction, supported by stronger domestic sales. Export demand remained weak but saw the mildest fall in twelve months, with softer declines in orders from the US, EU, China and Brazil. Foreign demand has now fallen for forty-six consecutive months.

Business confidence improved markedly, reaching a nine-month high. Fifty-six per cent of firms expect higher output over the coming year, underpinned by hopes of market stabilisation, expansion plans, new product launches and expectations that AI adoption and data-centre investment will enhance competitiveness. However, concerns persisted around government policy direction, trade uncertainties, elevated costs and fragile client confidence.

Employment fell for the thirteenth straight month as firms pursued cost savings, paused recruitment and reduced roles across permanent, temporary and agency categories. Backlogs of work shrank at the fastest pace since April, signalling ongoing excess capacity.

Supply chains deteriorated sharply, with vendor performance worsening to the greatest extent in almost a year amid capacity constraints, raw material shortages and port and customs delays. Factory gate prices fell for the first time in more than two years due to soft market conditions and discount pressure, while input cost inflation slowed to its weakest pace since October 2024.

Rob Dobson, director at S&P Global Market Intelligence, said, “November saw further signs of recovery in the UK manufacturing sector. The headline PMI is back in growth territory for the first time in over a year, with output up for a second month and the trend in new business stabilising following 13-months of continual decline. Business optimism has also continued its recovery, rising to a nine-month high.

“The numbers are especially encouraging as this improvement occurred despite November seeing elevated levels of business uncertainty, and in some cases an element of gloom, ahead of the Autumn Budget. The lifting of this uncertainty caused by the long lead-in to the Chancellor's budget announcement should hopefully provide a boost in December, but it will be interesting to see the extent to which business might react to the absence of any significant growth-promoting measures. After all, despite the improvement in the performance of the manufacturing sector, any growth is still worryingly weak.

“Rising competitive pressures and slower cost inflation meanwhile led to factory gate prices being cut for the first time in over two years. This combination of soft industrial performance and subsiding price pressures will add to the shift in policy debate away from inflation fears towards supporting economic growth.”

ALCHEMPro News Desk (KD)