Manufacturing growth picks up pace despite fear of long war in Middle East

By the Editorial Team · Tuesday, August 4, 2026

UK manufacturing output grew for the fourth month in a row in July, hitting its fastest pace in nearly two years, driven by rising new orders from both domestic and international markets. However, ongoing concerns about Middle East tensions and volatile commodity prices pose risks to production costs and employment growth in the sector.

UK manufacturing output increased for the fourth consecutive month in July, reaching its fastest growth rate in nearly two years, according to a recent survey of the sector. Despite this positive trend, concerns linger over the possibility of a prolonged conflict in the Middle East, which could disrupt oil and gas supplies and drive up production costs.

The S&P Global purchasing managers’ index (PMI), a key indicator of manufacturing activity, registered a reading of 51.9 in July, marking a slight decline from June's 52.5 but maintaining a nine-month streak of expansion. Readings above 50 signal growth in the sector.

This improvement follows a challenging period for UK manufacturers, marked notably by the implementation of U.S. tariffs in early 2025, which led to supply chain disruptions. The industry also faced setbacks last autumn when a cyberattack on Jaguar Land Rover temporarily halted production at the country’s largest carmaker.

The report attributed the latest rise in production primarily to increased new orders from both domestic and international clients. Total new business expanded for the eighth straight month, with a notable uptick in export orders from regions including the United States and Canada, the European Union, mainland China, India, and South Korea. Some companies reported smoother global supply chains compared to the turmoil experienced following the 2025 U.S. tariffs.

However, the growth in output has not translated into a significant rise in employment. Staffing levels increased for the fourth month in a row but at the slowest pace during the current period of growth. The report cited ongoing uncertainty about the future as a factor restraining hiring.

Commenting on the sector’s outlook, Ginni Cooper, manufacturing partner at the accountancy firm MHA, highlighted the resilience of manufacturers amid volatile commodity prices, particularly for oil and gas, which have caused fluctuations in the cost of essential raw materials. She noted that manufacturers’ adaptability to changing conditions had been thoroughly tested in recent months.

Cooper also welcomed recent initiatives by Andy Burnham aimed at improving vocational training in schools, suggesting such measures could support the sector’s ongoing recovery and development.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.