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UK manufacturing grew at fastest pace in 15 months in December amid uncertainty over autumn Budget and Jaguar Land Rover A new survey shows that cyberattacks are starting to wane.
The S&P Global UK manufacturing PMI survey, closely watched by economists, showed a reading of 50.6 in December, up from 50.2 in November.
Any reading above 50.0 means activity is growing, while any reading below 50.0 means activity is contracting.
The survey showed that manufacturing output increased for a third consecutive month and the level of new orders from companies rose for the first time since September 2024.
Some companies benefited from improved conditions at the end of the year after facing pressure from some market challenges.
This includes the impact of the entire supply chain being affected by a production shutdown at British carmaker Jaguar Land Rover (JLR) following a major cyber attack at the end of August.
The incident was related to a decline in overall motor production in September.
Sentiment has also shown signs of improving since the release of the Autumn Budget at the end of November, which provided some certainty on tax and policy measures affecting the UK industrial sector.
Demand within the UK was the main driver of growth in new orders from manufacturers last month, following a nearly four-year increase in new work contracted overseas.
However, the fall in new export business was smaller, with UK companies pointing to signs of recovery in demand in the US, Asia-Pacific and elsewhere. middle East area last month.
Rob Dobson, director of S&P Global Market Intelligence, said: “The domestic market continues to be a positive stimulus for growth, while new export business has taken a big step towards stabilization despite falling for four consecutive years.
“UK manufacturers benefited from a reduction in some headwinds towards the end of the year as the negative impact of uncertainty over the autumn budget, tariffs and the Jaguar Land Rover cyber attack all receded.
“Early 2026 will show whether growth can be sustained after these temporary boosts fade.”
Dobson said the driver of growth needs to be “more of a shift toward growing demand” rather than companies clearing backlogs.
Employment within the industry has also fallen for 14 consecutive months, but the decline was the lowest since the layoff period began.
Chris Barlow, head of manufacturing at accounting and consulting firm MHA, said his clients expect hiring to continue to slow in 2026 and are “turning to look for ways to work more efficiently, often through automation or improved processes”.
He added: “Government measures, such as the confirmation of an increase in the minimum wage, and the impact of the salary sacrifice cap, are making businesses cautious about hiring new staff.”
He also said that improving demand in the UK was “crucial for the outlook for manufacturing in 2026, as the road ahead for global trade is not expected to get any easier”.