UK Manufacturing Growth Picks Up as Trump Tariff Chaos Eases 2026

UK manufacturing growth picked up in July as the chaos from Trump tariffs began to ease, according to the latest S&P Global PMI survey. The sector expanded for the fourth consecutive month, with output rising at the fastest pace in almost two years.

UK Manufacturing PMI Rises Despite Global Uncertainty

The S&P Global purchasing managers’ index (PMI) dipped to 51.9 in July, down from 52.5 in June, but remained above the 50 no-change mark for the ninth straight month. The slight decline was attributed to concerns over a potential long war in the Middle East that could disrupt oil and gas supplies and raise production costs.

Despite the dip, manufacturers reported a strong increase in production, driven by rising intakes of new business from both domestic and export clients. Total new orders rose for the eighth successive month, with notable improvements in global supply chains after the disruption caused by US tariffs in 2025.

Export Orders Rebound as Tariff Chaos Fades

New export orders flowed in from the US, Canada, the EU, mainland China, India, and South Korea. This rebound signals that the worst of the tariff-driven turbulence may be behind the sector. However, the recovery has yet to translate into significant job creation.

“Uncertainty about the future dragged on the labour market in July. Although staffing levels increased for the fourth successive month, the rate of growth eased to near-stagnation and was the weakest during the current upturn,” the report noted.

Key Drivers of UK Manufacturing Growth

The latest survey highlights several factors supporting the sector’s recovery:

• Improved global supply chains after the 2025 tariff chaos
• Rising domestic demand from UK clients
• Strong export orders from major economies including the US and China
• Stabilising business confidence despite geopolitical risks

Comparison: Manufacturing PMI Trends (May–July)

The data suggests that while the overall PMI eased slightly, the underlying production momentum is robust. Manufacturers are cautiously optimistic, but remain watchful of external shocks such as the Middle East conflict.

Labour Market Remains Subdued

Employment growth in the manufacturing sector was minimal in July. Despite four consecutive months of hiring, the pace slowed to near-stagnation. This reflects ongoing caution among firms, likely due to geopolitical uncertainty and the lingering effects of past tariff disruptions.

The Jaguar Land Rover cyberattack last autumn also highlighted vulnerabilities in the sector, but the latest survey indicates that supply chains are recovering.

What This Means for the UK Economy

The sustained expansion in manufacturing is a positive sign for the broader UK economy. With the PMI remaining above 50 for nine months, the sector is contributing to GDP growth. However, the weak labour market and geopolitical risks could temper future gains.

Rob Dobson, director at S&P Global Market Intelligence, said July brought “further encouragement for the UK manufacturing sector.” The coming months will be crucial to see if the recovery can be sustained.

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