Manufacturing exports highest in four years despite jobs decline
Export orders across the manufacturing sector hit its highest level in four years and a half despite a continued decline in employment across the sector, new research has shown.
S&P Global’s purchasing managers’ index (PMI) has pointed to upbeat news on the UK economy ahead of tomorrow’s Spring Statement, which will be delivered by Chancellor Rachel Reeves around noon.
The manufacturing PMI rose to 51.7 in February, above the 50-figure benchmark for neutrality in output.
It was the highest figure recorded since late 2024, with manufacturing output now expanding in each of the last four months.
Large and medium-sized companies were boosted by an uptick in export orders, with intakes of new work from China, the EU and the Middle East rising at the fastest pace in four and a half years.
The data reflects firms’ spirited approach to international trade in spite of disruptions brought by President Trump’s tariffs.
Consumer goods were the strongest-performing sector, researchers said, though smaller manufacturers struggled to improve production.
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In bleaker data, declines were registered in employment and stocks of purchases. S&P Global analysts said a decline in employment was the mildest seen over the last 16 months.
Rob Dobson, the director at S&P Global Market Intelligence, said: “UK manufacturing has made an encouraging start to 20
“Growth of new export business hit a four-and-a-half year high, as improving client confidence in markets such as North America, mainland China, the EU and Middle East led to new contract wins.
“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 US tariffs.”
WPI Strategy economist Martin Beck said the latest data offered a “relatively bullish view” on growth in the UK economy while improvements in domestic demand and government incentives “could unlock fresh investment”.
“Manufacturing accounts for only around 10 per cent of UK GDP, so short-term swings have a limited impact on headline growth,” Beck said.
“But its role in productivity, innovation and exports means it punches well above its weight. If the improvement in the PMI since the start of the year is sustained, it could mark another signal of firmer momentum across the wider economy.”