PwC comments on the S&P Global UK Manufacturing PMI

Cara Haffey, Leader of Industry for Industrials and Services at PwC UK said:

"January’s PMI data continues to underscore the challenges facing the UK manufacturing sector, with the PMI registering at 48.3. Despite a slight improvement from December's 11-month low, the sector remains in contraction for the fourth consecutive month, driven by a complex interplay of domestic and international pressures.

"The PMI notes that small and medium-sized manufacturers are experiencing the most significant pressures, with sharper declines in both output and new orders compared to larger firms. Smaller firms will have tighter limits towards working capital and investment and therefore face steep challenges with labour and input cost increases, as well as dealing with changes in minimum wage legislation and upcoming increases to employer National Insurance contributions.

“Conditions remain weakened in both domestic and international markets. New export business has fallen and PwC and Make UK’s 2025 executive survey highlighted that this is a key contributor to manufacturing success and confidence. In addition to new export business falling in the EU and Middle East, the potential implications of US trade tariffs remain a concern, and could become a critical factor moving forward.

"Optimism, which has often shown resilience, remained at one of its lowest levels in two years. This subdued sentiment, having only marginally improved from December's 24-month low, underscores the gravity of concerns. While navigating these headwinds, it is crucial for businesses to remain agile and adaptable, continuing to assess possible efficiencies and market opportunities whilst maintaining investment into technology and sustainability to position themselves for long-term growth.”