UK manufacturing continued to expand in June, although the pace of overall growth slowed from May’s four-year high as the boost from customer stockpiling began to fade, according to the latest S&P Global UK Manufacturing Purchasing Managers’ Index (PMI) data.
The headline PMI registered 52.5 in June, down from 53.9 in May and below the earlier flash estimate of 53.1. Despite the decline, the reading remained above the crucial 50.0 threshold for the eighth consecutive month, signalling continued expansion across the sector.
The UK continued to outperform the eurozone, where the headline manufacturing PMI edged down to 51.4 in June from 51.6 in May, marking a four-month low but remaining in expansion territory for a fifth consecutive month. While eurozone factory output accelerated to a two-month high and business confidence improved, export demand remained weak and manufacturers also warned that the benefits of precautionary stockpiling were beginning to fade. Inflationary pressures, however, eased across the bloc, with both input costs and factory gate prices rising at their slowest pace since March.
Manufacturing output accelerated for a third successive month, growing at its fastest rate since September 2024. S&P Global said increased production was driven by stronger new work, improved market confidence and promotional activity, with consumer and intermediate goods manufacturers reporting growth while investment goods producers continued to see output decline.
However, there were signs that the current upturn is beginning to lose momentum.
Although new orders increased for the seventh consecutive month, the rate of growth eased to its weakest level since December 2025. Export demand also softened, with overseas sales rising only modestly despite improved demand from mainland China, the EU and the US. Some manufacturers also reported that conflict in the Middle East had stalled growth opportunities in the region.
“The UK manufacturing sector ended the second quarter of the year on a positive note, with output expanding at the fastest pace since September 2024.
“Sustaining the upturn is becoming a bigger concern. Manufacturers are currently benefiting from client strategic stockpiling, as they safeguard against supply chain disruptions and expected price rises. A drop in the rate of growth of new work intakes suggests this boost is already starting to fade.
“Manufacturers’ optimism about the year ahead also remains tepid, with many concerned about geopolitical tensions and uncertain over the future course of government policy.”
Rob Dobson, director at S&P Global Market Intelligence
Business confidence remained subdued, with 48% of manufacturers expecting output to increase over the coming year, compared with a combined 53% anticipating either no change or a decline. Firms expecting growth pointed to new market opportunities, product launches and the adoption of new technologies, including AI and data centres, while others cited concerns over government policy and geopolitical uncertainty.
Employment increased for the third consecutive month, although hiring remained modest as some manufacturers continued to freeze or reduce headcount to offset rising costs and ongoing market uncertainty.
Supply chain pressures also persisted during June. Delivery times lengthened further as businesses continued to face shipping delays, material shortages, tariff disruption and port congestion. While input cost inflation eased to its weakest level since March, it remained elevated, prompting manufacturers to raise selling prices for the seventh month running, albeit at a slower pace than in May.
Commenting on the latest PMI data, Dave Atkinson, UK Head of Manufacturing at Lloyds, said: “While today’s reading shows growth has slowed, the sector is still growing overall. It also shows how manufacturers have become even more flexible and more adept at dealing with challenges over recent years. Further, the underlying picture is more positive than it has been in previous months, with lower energy and input costs helping ease some pressure.
“Although many businesses have credit and financing in place, some are delaying spending until conditions are clearer. That said, they remain well placed to invest and pursue growth when conditions allow.”
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