Finance
UK factory activity expands for fourth straight month in February, PMI shows
Published by Global Banking & Finance Review®
Posted on March 2, 2026
3 min readLast updated: March 2, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on March 2, 2026
3 min readLast updated: March 2, 2026
Britain’s manufacturing sector continued its expansion in February, with the PMI holding above growth threshold and export orders surging to a multi‑year high. Cost pressures intensified even as hiring contraction moderated.
By Suban Abdulla
LONDON, March 2 (Reuters) - Activity in Britain's manufacturing sector rose last month and export orders increased by the most in four-and-a-half years, according to a survey on Monday that showed steady growth momentum at the start of the year despite stronger cost pressures.
The S&P Global Purchasing Managers' Index for British manufacturing edged down to 51.7 in February from 51.8 in January, which was the highest since August 2024.
Monday's reading above 50 denotes growth - and represents the longest string of increases since the five months to September 2024 - although it was slightly below an earlier provisional estimate of 52.0.
S&P's measures of new export orders rose to 52.4 from 51.9, its highest since August 2021, which reflected stronger demand from China, Europe, the United States, and the Middle East.
"UK manufacturing has made an encouraging start to 2026," said Rob Dobson, a director at S&P Global Market Intelligence.
"New product launches, rising client confidence and planned investments are all forecast to help generate growth over the next year, offsetting some of the caution companies are still exhibiting due to recent government policy changes and ongoing geopolitical uncertainty, especially in relation to U.S. tariffs," he added.
While business confidence remained close to its highest since shortly after Prime Minister Keir Starmer's Labour government came to power, some respondents did express concern about its future.
On Friday, Labour suffered a heavy defeat in a parliamentary election for an area of Greater Manchester that it had dominated for almost a century.
Britain's unemployment rate has risen steadily over the past year, reaching its highest in nearly five years in the final quarter of 2025. But there were some signs of stabilisation in hiring, S&P said, with the rate of contraction easing to the weakest during the 16-month downturn period.
Cost pressures faced by businesses increased at the strongest rate since August 2025, while the PMI's gauge of firms' price increases eased slightly.
S&P said manufacturers reported higher costs for chemicals, energy, electronic components, copper, gold and silver, as well as suppliers passing on higher labour costs after last year's rise in employment taxes and the minimum wage.
(Reporting by Suban Abdulla; Editing by Toby Chopra)
The PMI for UK manufacturing shows growth for the fourth consecutive month in February, with activity and export orders both rising.
UK export orders increased at the fastest rate in four-and-a-half years, driven by demand from China, Europe, the US, and the Middle East.
Manufacturers reported increased cost pressures from chemicals, energy, and higher labour costs, but price increases have slightly eased.
Business confidence remained high despite concerns related to government policy changes and geopolitical uncertainties.
While the unemployment rate has risen, the rate of job contraction in manufacturing has eased to its slowest during the recent downturn.
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