UK Manufacturing Output Eases in Sept., Weakest in 6-Month
UK manufacturing output growth slows for the second month in a row, with input and output price inflation both strengthening, according to the S&P Global Purchasing Managers’ Index (PMI) for September 2026, released today.
“A disappointing September PMI saw the rate of increase in UK manufacturing production slow further”,Rob Dobson, Director at S&P Global Market Intelligence, said.
Dobson said output growth was its weakest seen over the past six months, with orders and exports growing only modestly. Slower demand growth was to be expected given the higher energy prices seen during the month.
“The big shift in September was in the survey’s price measures, which switched from signalling a decline in inflationary pressures to a renewed uplift.
“After hitting conflict-driven highs earlier in the year, rates of increase in both input costs and factory gate selling prices accelerated for the first time since May.
“Energy and electronics prices remain especially elevated, while supply disruptions and rising diesel prices are now hitting transportation costs across industry.
“These price moves will be closely watched by the Bank of England for any signs of a more sustained and broader price uplift potentially taking hold.
“There are still some positive shoots of growth looking ahead, however, as manufacturers remain generally positive about the outlook.
“Almost half expect output to rise over the coming year. Confidence nevertheless remains subdued compared to that seen prior to the outbreak of the war in the Middle East, dampened not only by geopolitical issues but also reflecting uncertainty over policy direction at home. The upcoming Budget will therefore likely prove material in steering confidence”.
September saw the UK manufacturing upturn continue, as output, new orders, and employment all rose.
The outlook for industry also remained generally positive, with almost half of manufacturers expecting production to increase over the coming 12 months.
The seasonally adjusted S&P Global UK Manufacturing Purchasing Managers’ Index™ (PMI®) posted 51.9 in September, up from 51.7 in August.
The PMI has signalled expansion in each of the past 11 months. Four of the five PMI components were at levels consistent with improved overall operating conditions.
Alongside the expansions in output, new orders and employment, there was also a further increase in average vendor lead times. In contrast, stocks of purchases contracted.
At the end of the third quarter, the rate of increase in manufacturing production slowed slightly, rising at the weakest pace in the current six-month expansion.
Companies continued to scale up output in response to rising new order intake, with new work growing in both domestic and export markets (including the US, APAC region, Brazil, and Australia).
Overall, the volume of new business placed with UK manufacturers rose for the tenth month running, at a faster pace than in August.
There were signs of widening performance disparities across sub-sectors and company sizes, however.
The latest increase in production was centred on the investment goods industry, which saw its fastest growth since the end of 2017, while both the consumer and intermediate goods categories contracted.
Small manufacturers, meanwhile, saw production and new business contract sharply, in contrast to the growth registered by medium- and large-scale producers.
UK manufacturers maintained a positive outlook for the sector in September, with almost half of firms (49%) forecasting output to rise over the coming year.
That said, the degree of confidence was slightly below August’s six-month high. Reasons provided for positive sentiment included planned company expansions, new product launches, a hoped for rebound in market confidence and investment projects.
That said, several firms noted ongoing concerns about the geopolitical, macroeconomic and domestic policy outlooks. Manufacturing employment rose for the sixth successive month in September, with the rate of job creation staying close to August’s two-year high.
Staffing levels were raised to meet the dual needs of new order growth and increased backlogs.
Outstanding business expanded for the second time in three months. Stocks of finished goods and purchases both declined, the latter despite increased input buying volumes.
Supply chains remained under noticeable stress during September, as highlighted by a further marked increase in average vendor delivery times.
Supplier performance deteriorated to its worst level since June, reflecting the impacts of port congestion (domestic and international), shipping delays, geopolitical tensions, and resulting raw material shortages.
Stretched supply chains also exerted upward pressure on purchasing costs during September. The rate of input price inflation accelerated for the first time in four months, amid reports of higher costs for chemicals, electronics, energy and food stuffs.
Geopolitical conflicts and rising transportation costs were also mentioned by several firms, with the latter often linked to increased diesel prices. Average output charges were raised in response to rising costs.
Selling prices have risen in each of the past ten months, with the rate of inflation strengthening in September. For both price measures (input costs and output charges), rates of increase were higher at SMEs than at largescale producers.
