The UK manufacturing sector registered faster expansions of output and new orders at the start of the fourth quarter.
The outlook for industry also strengthened, with confidence about the year ahead rising to an eight-month high.
The news on supply chains and price pressures was less reassuring, with input cost inflation accelerating and vendor lead times lengthening to one of the greatest extents in four years.
The seasonally adjusted S&P Global UK Manufacturing Purchasing Managers’ Index™ (PMI®) rose to a five-month high of 52.8 in October, up from 51.9 in September and unchanged from the earlier flash estimate.
Data were collected between 12-27 October, meaning the survey closed before the UK Autumn Budget statement on the 28th October.
Three of the five PMI components were at levels consistent with an improvement in overall operating conditions, with output and new orders rising and suppliers' delivery times lengthening. Stocks of purchases fell further, while employment was unchanged following a six-month sequence of job creation.
Manufacturing production rose for the seventh successive month in October, with the rate of expansion hitting a 25-month high. Companies responded to improved intakes of new business and stronger market conditions.
Business optimism rose to an eight-month high in October. Manufacturers linked their optimistic outlook to planned business expansions, signs of market recovery, spending on capital equipment and AI (including data centres), new product launches and better order pipelines. Several firms raised concerns about possible government policy changes and the high-cost environment.
Rob Dobson, Director at S&P Global Market Intelligence, said: “UK manufacturing showed resilience in the lead up to the Autumn Budget. Rates of growth in output and new orders both gathered pace in October, as companies responded to signs of improving demand in both domestic and overseas markets, including new work received from mainland China, the EU and the US.
“Concerns about possible policy changes filtered through to the labour market, however, with the upturn in employee numbers halting following a six-month sequence of increased hirings. The remainder of 2026 will see if the confirmed rise in the minimum wage for next year will continue to weigh on employment trends.
“Rising labour costs are also coming at a time when the cost environment is already generally high. As well as higher wage costs, manufacturers are being buffeted by rising fuel, energy and transportation costs as supply chain shocks and delays continued to drive up inflationary pressures. Input prices consequently rose to one of the greatest extents in the past four years in October which, alongside the signs of resilience in the manufacturing sector, will further shorten the odds of interest rate hikes to come from the Bank of England.”
