UK PMI Manufacturing was finalized at 51.8 in January, up from December’s 50.6 and marking a 17-month high. The reading signals a solid start to 2026 for the sector, showing resilience despite a challenging backdrop of geopolitical tension and trade uncertainty.
According to Rob Dobson of S&P Global Market Intelligence, growth momentum improved notably. Output and order books expanded at a faster pace, while new export business rose for the first time in four years, led by demand from Europe, China, and the US. Business confidence also rebounded, reaching its highest level since before the 2024 Autumn Budget, as firms focused on opportunities ahead rather than near-term policy and geopolitical risks.
The labor market picture showed tentative stabilization. Although hiring remained weak, the pace of job cuts slowed to its mildest in 15 months. That said, inflation pressures are resurfacing, with higher Minimum Wage and employer National Insurance costs feeding through supply chains alongside rising metals prices, posing a potential constraint on margins in coming months.
