UK Factory Sector: Output Hits Two-Year Peak

British factories produced goods at their fastest clip in more than two years during October.

The S&P Global Purchasing Managers’ Index for manufacturers climbed to 52.8, marking a five-month high. This figure matched the preliminary estimate released earlier. The specific output component rose to 53.6 from 51.5 in September. That level represents the strongest reading since September 2024.

Rob Dobson, a director at S&P Global Market Intelligence, attributed the momentum to improved demand. He noted that companies received new work from mainland China, the European Union, and the United States. New order growth was the strongest seen since July. Expectations for future output also showed the largest improvement since November 2025.

Cost pressures are rising sharply. Manufacturers reported that input costs increased at the fastest rate since June. This pace is among the quickest seen since the major inflation surge in 2022. The Bank of England is expected to raise interest rates this week, a move that could be influenced by these cost trends.

Employment in the sector stopped growing after six months of modest expansion. Smaller manufacturers cited high staff costs and rising input prices as the primary reasons for the hiring freeze. Official data indicates that total manufacturing output rose by 3.0% in the 12 months ending in August. That is the largest increase since March 2024.

The survey data was collected between October 12 and 27. This period preceded the first budget presented by finance minister John Healey. The budget largely spared businesses from new tax increases but announced a 3.9% rise in the minimum wage for the coming year.