Source: Sharecast
The S&P Global UK manufacturing purchasing managers’ index rose to a 12-month of 49.7 in October, up from 46.2 in September.
It was the first time in a year that output has risen, although it remains narrowly in negative territory.
A reading above the neutral 50.0 indicates growth, while one below it suggests contraction.
The uplift was attributed to depleted backlogs of work, increased stocks and, for certain respondents, Jaguar Land Rover restarting production.
The country’s largest car manufacturer – which supports an extensive supply chain in the UK – was forced to shutter its factories in September following a cyberattack.
However, market conditions remained “tough”, respondents noted, weighed down by weak demand in both domestic and overseas markets, stiff competition and ongoing tariff uncertainty.
The level of new export orders declined for the 45th month in a row.
Rob Dobson, director at S&P Global Market Intelligence, said October’s rise in output was “positive”.
However, he warned: “There are real concerns that the bounce could prove short-lived.
“Not only did October see auto sector supply chains benefit from the production restart at JLR – which will provide only a temporary spike in production – but sluggish demand meant October’s output growth was dependent on firms eating into backlogs.
“Manufacturers seem stuck in a holding pattern until the domestic policy and geopolitical backdrops exhibit greater clarity.”
Rachel Reeves is due to present her Budget at the end of this month. Many businesses are concerned that taxes will once again have to rise as the chancellor battles record government spending, higher debt repayments and sluggish economic growth.
Matt Swannell, chief economic adviser to the EY Item Club, said: “Despite October’s stronger outturn, the sector still faces some major challenges.
“The survey’s forward-looking balances continued to disappoint, with businesses reporting a further broad-based fall in new orders and subdued expectations of future activity levels.
"2026 will likely be another challenging year for manufacturers, as weaker real household income growth weighs on demand for consumer goods, fiscal policy tightens and uncertainty around US trade policy lingers.”
Data were collected between 9 and 28 October. Surveys were sent to purchasing managers in panel of around 650 manufacturers.
