UK Manufacturing PMI Rises to 6-Month High, But Sector Remains in Contraction

📌 Key Takeaways

• UK Manufacturing PMI rose to 48.2 in July, up from 47.7 in June
• Output stabilized after eight straight months of contraction
• US tariffs continued to delay export orders and investment decisions
• New orders declined, and job cuts accelerated
• Both input and output prices rose, adding inflationary pressure
• Business confidence remains weak amid domestic and global uncertainty

UK Manufacturing PMI Improves Slightly in July 2025

The UK Manufacturing PMI rose to 48.2 in July 2025, according to S&P Global’s preliminary estimate. Although the index remains below the 50 threshold that separates growth from contraction, this was the mildest decline in factory activity since January, slightly beating expectations of 48.0.

The improvement was driven by a stabilization in output, which marked an end to an eight-month streak of falling production. However, new order volumes continued to decline, and employment cuts accelerated, signaling lingering weakness.

US Trade Policy Weighs on UK Orders

Many firms cited U.S. tariffs as a key reason for delayed export spending and contract postponements. The impact was particularly evident in high-value manufacturing sectors, where clients in North America are waiting for policy clarity.

“Exporters are hesitant to commit under ongoing trade uncertainty,” one survey respondent noted. The lack of momentum in new business reflects broader global hesitancy, with geopolitical tensions and weak domestic demand acting as major headwinds.

Read More: UK Manufacturing PMI Falls Sharply in April

💸 Inflation Pressures and Muted Optimism

Input costs and output prices both increased in July, adding pressure to already tight margins. This price rise, coupled with falling demand, has created a challenging environment for many firms.

Confidence levels among manufacturers remained subdued. While some businesses are optimistic due to rising defense-related demand, most are still cautious because of persistent cost pressures, political instability, and a fragile global trade landscape.

📊 Summary Table: UK Manufacturing PMI Data

📉 Outlook: Mild Improvement, but Recovery Not Yet in Sight

While the July PMI uptick offers a glimmer of hope, the broader message is one of continued caution. Manufacturing activity is contracting at a slower pace, but structural challenges remain, including international trade disruptions, inflationary input costs, and policy-driven uncertainty.

Will the UK’s manufacturing sector recover later this year or is more turbulence ahead? 📉
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