The UK’s manufacturing sector continued its recovery in May, with the headline Purchasing Managers’ Index (PMI) rising to its highest level in four years as output, orders and employment all strengthened.
According to the latest S&P Global UK Manufacturing PMI, the seasonally adjusted index rose to 53.9 in May, up from 53.7 in April and marking the seventh consecutive month of expansion. A reading above 50 signals growth in activity.
The survey found that all five PMI sub-components – new orders, output, employment, suppliers’ delivery times and stocks of purchases – were at levels typically associated with improving operating conditions. It was the first time this had occurred since May 2022.
Manufacturing production increased for a second successive month, driven by growth in the intermediate and investment goods sectors, while new orders rose for a sixth consecutive month. Export demand also strengthened, with manufacturers reporting improved sales to markets including mainland China, Europe, Japan, North America and South Korea.
The latest figures suggest UK manufacturers are currently outperforming many of their European counterparts. While the UK Manufacturing PMI climbed to a four-year high of 53.9 in May, the equivalent eurozone reading slipped to 51.6 as demand stalled and growth slowed across the bloc. Both regions are experiencing rising cost pressures and worsening supply chain delays linked to geopolitical instability and disruption to global shipping routes, but the UK’s stronger expansion in output and new orders points to a more resilient recovery heading into the second half of the year.
However, the report also highlighted mounting concerns over supply chain disruption and rising costs, which continue to threaten the sustainability of the recovery.
Input cost inflation accelerated to its highest level in almost four years during May, with manufacturers citing higher prices for chemicals, electronics, energy, fuels, metals, packaging materials and timber. Businesses also pointed to geopolitical instability, tariffs, labour cost increases and higher taxes as key drivers of inflationary pressure.
Supply chains remained under significant strain, with manufacturers reporting further deterioration in supplier delivery times. Shipping delays linked to conflict in the Middle East and restrictions affecting passage through the Strait of Hormuz were frequently cited as causes of disruption.
Commenting on the findings, Rob Dobson, Director at S&P Global Market Intelligence, said the sector’s recovery was gathering pace but warned that underlying risks remain.
“May saw the UK manufacturing upturn gather pace, as growth of production and business optimism both rose to three-month highs,” he said.
“The sustainability of the upturn remains in doubt, however. The recent upturn in new order intakes that is driving the expansion in output is heavily reliant on both manufacturers and their clients front-loading purchases to mitigate expected war-related price increases and supply chain disruption.”
Rob Dobson, Director at S&P Global Market Intelligence.
Dobson added that rising costs and ongoing supply chain pressures could continue to constrain growth for as long as geopolitical tensions and threats to major transport routes persist.
The survey also revealed growing confidence among manufacturers, with almost half of respondents expecting output to increase over the coming year. Businesses cited stronger demand, new product launches, export growth and hopes for improved geopolitical conditions as reasons for optimism. Nevertheless, around one in ten manufacturers still anticipate a decline in output due to policy uncertainty, rising costs and ongoing geopolitical instability.
The latest figures suggest that while UK manufacturing continues to build momentum, the sector’s recovery remains vulnerable to external shocks and inflationary pressures that could limit growth in the months ahead.
For more articles like this, visit our Leadership channel
