UK manufacturing showed a strong start to 2026, with the Purchasing Managers’ Index (PMI) reaching a 17-month high of 51.8 in January. This marks the third consecutive month of growth, exceeding the flash estimate. Production expanded, driven by larger manufacturers. New orders surged at the fastest pace in almost four years, boosted by growth in various sectors.

New export orders increased for the first time in four years. Manufacturers are reporting higher sales to Europe, the US, China, and emerging markets. Business optimism is up, reflecting hopes for market recovery and planned investments. While staffing levels continue to fall, the rate of job cuts is slowing.

Input costs and selling prices are rising, attributed to increased raw material and supplier costs. Energy, freight, and metals are more expensive. S&P Global Market Intelligence noted the sector's resilience amid rising geopolitical tensions. This expansion is positive news for the UK economy, especially as it navigates ongoing global uncertainties.