UK Manufacturing Growth Slows to 5-Month Low While Private Sector Accelerates

UK Manufacturing Growth Slows to 5-Month Low

The UK Manufacturing PMI eased to 51.5 in August 2026, the lowest level in five months, from 51.9 in July, flash data showed. Manufacturing output growth slowed to a marginal pace as precautionary stock-building cooled, while geopolitical uncertainty and elevated cost pressures constrained activity. Input cost inflation remained elevated, largely due to higher energy prices and supply disruptions linked to the Middle East conflict, pushing up fuel surcharges, transportation costs and raw material prices. Meanwhile, output price inflation remained below previous highs. Constrained budgets and elevated risk aversion continued to weigh on order books. However, business optimism improved, supported by hopes for a turnaround in broader economic conditions.

UK Private Sector Activity Unexpectedly Accelerates

The S&P Global UK Composite PMI rose to 52.5 in August from 52.5 in the previous month, firmly above market expectations that it would ease to 51.6, according to a flash estimate. The growth was bolstered by fresh traction for the services providing sector (52.8 vs 52.1 in July), which offset a slowdown in the manufacturing sector (51.2 vs 52.9). New orders at the aggregate level improved to the most since February, before the war in the Middle East started, driven by resilience in services. Still, staffing numbers dropped further to approach nearly two years of consecutive monthly declines, with employers continuing to cite surging labor costs due to new National Insurance contributions. Input costs for the private sector accelerated due to high fuel prices and wages, driving output charge inflation to rebound. Looking ahead, business expectations at the aggregate improved for a third month on improving margins since energy prices peaked in June.

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