Article
UK Manufacturing Shows Early Year Momentum as PMI Rises to 51.6
The UK manufacturing sector has started 2026 on a more positive footing, with the S&P Global UK Manufacturing PMI rising to 51.6 in January, up from 50.6 in December and ahead of market expectations. Any reading above 50 indicates expansion, and this latest figure points to the strongest improvement in manufacturing conditions since August 2024.
While the increase may appear modest on the surface, the detail beneath the headline number suggests a more meaningful shift in momentum across the sector.
What’s Driving the Improvement?
The January uplift was primarily fuelled by:
- The largest rise in production since October
- The first increase in new export orders in four years
- A gradual stabilisation of domestic demand
The return of export growth is particularly significant. For several years, UK manufacturers have faced headwinds from global economic uncertainty, supply chain disruptions, and shifting trade dynamics. A positive turn in export orders indicates that international demand for UK goods may finally be strengthening, offering a potential tailwind for the sector as the year progresses.
A Turning Point or a Short-Term Boost?
Although the PMI remains only slightly above the neutral 50 mark, the trend is encouraging. The move from contractionary or flat conditions into expansion territory for a second consecutive month suggests the sector may be entering a period of cautious recovery.
However, challenges remain:
- Cost pressures continue to affect margins
- Hiring decisions are still being approached cautiously
- Demand remains uneven across different manufacturing sub-sectors
As a result, most manufacturers are likely to take a measured approach to investment and recruitment until the improvement becomes more sustained.
At Chase & Holland we have noted a clear uplift in recruitment from our Manufacturing clients across the board. Particularly FMCG and those who export.
What This Means for the Jobs Market
For the employment market, particularly across finance, supply chain, operations, and engineering. Even modest growth in manufacturing activity tends to have a ripple effect.
Historically, when production and export orders pick up, businesses begin to:
- Increase capacity
- Improve planning and forecasting functions
- Strengthen financial controls and reporting
- Invest in supply chain resilience
This often translates into increased hiring activity, initially at key operational and finance levels before expanding into broader functions.
Final Thoughts
After a challenging period, the latest PMI data suggests that UK manufacturing may be turning a corner. The return of export growth and stronger production figures offer reasons for cautious optimism.
At Chase & Holland we have seen employers starting a more active recruitment cycle. For candidates we are seeing more opportunities particularly in commercially focused finance, operations, and supply chain roles. This has seen us creating a new additional role for the team here at Chase & Holland running an Operations Desk. If you are interested, please contact Ian Holland on 07725-723848.
