UK factories grew for a fifth month in a row in July 2026, but not as quickly as early signs had suggested. A widely watched measure of factory activity called the PMI — short for Purchasing Managers' Index — came in at 51.9 in its final July reading, released on July 30. That was down from an earlier estimate of 52.8 reported on July 24 (S&P Global). Think of the PMI as a health check for the manufacturing sector: any number above 50 means factories are growing, and anything below 50 means they are shrinking (The Guardian).

This growth streak built up through the spring. The index hit 53.9 in May 2026, its highest level since 2022, before slipping to 52.5 in June — which was itself lower than an earlier estimate of 53.1 (Morningstar; Reuters). The earlier July figure of 52.8 had suggested growth was still speeding up, before the final number was revised down to 51.9 (S&P Global).

The July report from S&P Global found that production and new orders both grew faster than before, while the cost of raw materials rose much more slowly. That is a welcome change from May, when those costs had been climbing at their fastest pace since June 2022, pushed up by higher chemical prices (S&P Global; Reuters). June's data had already shown faster output but also rising prices and supply delays (S&P Global).

The increase in UK production was driven by new orders from both customers inside the UK and abroad. Total new orders rose for the eighth straight month as of July 2026, and some companies said global supply chains were working better after the disruption caused by US tariffs in 2025 (The Guardian).

Export orders in July came from the US, Canada, the EU, mainland China, India, and South Korea. That spread across both sides of the Atlantic and major Asian economies suggests UK factories are winning business from many places at once, rather than depending on one market.

Rob Dobson, a director at S&P Global Market Intelligence, said July brought "further encouragement" for UK manufacturing, with growth in output, new orders, and exports all picking up. He said a pause on hiring in July was likely to be temporary, because the rush of new business had left factories with a backlog of unfinished work (The Guardian).

The hiring numbers tell the story. UK factory staffing levels rose for the fourth straight month as of July 2026, but barely — the growth was the weakest of the entire upturn (The Guardian). Rising orders alongside stalling hiring is a pattern often seen when firms are meeting extra demand by working their existing staff and equipment harder, rather than taking on new employees right away.

Ginni Cooper, a manufacturing partner at the accountancy firm MHA, said the sector had proved resilient despite "yo-yoing commodity prices" — the cost of basic goods like oil and gas swinging sharply up and down in recent months (The Guardian). The slower rise in input costs seen in July fits that picture: a sharp increase in costs earlier in the spring has calmed down, though what happens to energy and chemical prices will still be the biggest factor in whether factory profits hold up.

The broader context matters for judging whether this recovery will last. UK manufacturing went through a rough patch after Donald Trump's "liberation day" tariffs took effect in spring 2025, and after a computer hack at Jaguar Land Rover — the UK's largest carmaker — halted production in autumn 2025 (The Guardian). In June 2025, the PMI stood at 47.7, up from 46.4 in May but still in shrinking territory (Reuters). The shift from below 48 a year ago to five straight months above 50 in mid-2026 is a real turnaround, though the downward revision to 51.9 in the final July figure takes some of the shine off.

For comparison, the US manufacturing PMI edged down to 53.8 in July 2026 from 53.9 in June, leaving the UK about two points behind its American counterpart but still in growth territory (Reuters.

The second half of 2026 carries clear risks. Matt Swannell, chief economic adviser to the consultancy the Item Club, said he expected UK manufacturing to face a difficult period later in 2026, with conflict in the Middle East the biggest unknown (The Guardian). The connection is direct: instability in the Middle East pushes up energy prices, which in turn raise the cost of running a factory. Cooper's point about swinging commodity prices and Swannell's warning about geopolitical risk point to the same weakness: the sector's recovery is real, but it depends on factors outside the UK's control.

One more thing is worth noticing. June's final reading of 52.5 was 0.6 points below its earlier estimate of 53.1, and July's final of 51.9 was 0.9 points below its earlier estimate of 52.8. Two straight downward revisions of this size suggest the early figures are consistently more optimistic than the full data turns out to be — something to keep in mind when the next early estimate appears. S&P Global publishes the Manufacturing PMI on the first working day of each month (S&P Global).