UK manufacturing growth eases to five-month low in August

1st Sep 2026 11:13

(Sharecast News) - Growth in the UK manufacturing sector eased to a five-month low in August as growth rates in both output and new orders lost momentum, according to a survey released on Tuesday.

The S&P Global manufacturing purchasing managers' index declined to 51.7 from 51.9 in July but was above the flash estimate of 51.5. The index has now registered above the 50.0 mark that separates contraction from expansion for 10 months in a row.

The survey also showed that employment rose for the fifth consecutive month and at the quickest pace for two years, while business optimism rose to a six-month high.

Rob Dobson, director at S&P Global Market Intelligence, said: "The rate of expansion in the UK manufacturing sector cooled in August, with output and new order growth losing traction. There are still signs for continued optimism, however, as manufacturers reported a positive outlook for the year ahead. Business confidence rose to a six-month high and job creation was the strongest for two years. This suggests that the slowdown was mainly driven by a reduced focus on maintaining precautionary stocks as economic uncertainty eases, especially as domestic and overseas clients continue to show a willingness to spend albeit with a relatively high degree of caution.

"Although cost and supply chain pressures remain potentially damaging, there was better news on these fronts too. Volatility in energy markets, supply constraints, geopolitical strife and transportation disruptions are all keeping cost rises at elevated levels, but August at least saw purchase price inflation descend from recent peaks to a six-month low. Supply chain delays were the least marked for six months too, which should provide additional respite to cost pressures barring any further major disruptions."