British factories recorded their fastest output growth in more than two years in October, according to the latest S&P Global purchasing managers survey, starting the final quarter of 2026 on a stronger footing.

The headline manufacturing PMI rose to 52.8 in October, up from 51.9 in September and a five-month high, in line with an earlier flash estimate. Any reading above 50 signals expansion.

Output leads the improvement

The output component climbed to 53.6 from 51.5, its highest since September 2024. Reuters reports it as the strongest output growth in more than two years. New-order growth was the strongest since July, and manufacturers' expectations for future output showed the biggest improvement since November 2025.

S&P Global Market Intelligence director Rob Dobson said output and new-order growth gathered pace, with improving domestic and overseas demand, including new work from mainland China, the EU and the US.

Costs and hiring temper the picture

Input costs rose at the fastest rate since June, and at one of the fastest paces since the 2022 inflation surge — a concern ahead of the Bank of England's decision this week. Employment growth in the sector ground to a halt after six months of sometimes modest expansion, which firms — especially smaller manufacturers — blamed on high staff costs and rising input prices.

The survey data was collected between 12 and 27 October, before Chancellor John Healey's first Budget, which largely spared businesses from tax increases but announced a 3.9% rise in the minimum wage for next year. Official data cited by Reuters shows manufacturing output rose 3.0% in the 12 months to August, the biggest increase since March 2024.

Sources: S&P Global UK manufacturing PMI, October 2026, via Reuters.