The improvement was driven by higher production volumes, particularly across intermediate and investment goods industries, while consumer goods output declined slightly. New orders also increased for the sixth straight month, supported by stronger domestic and export demand, the S&P Global said in a press release.
Manufacturers reported improved export business from key overseas markets including China, Europe, Japan, North America and South Korea.
The UK manufacturing sector extended its recovery in May 2026, with the S&P Global UK Manufacturing PMI rising to a four-year high of 53.9 from 53.7 in April.
Growth was supported by stronger output and new orders, including export demand.
However, manufacturers continued to face rising input costs, supply chain disruptions, and shipping delays linked to geopolitical tensions.
However, survey participants indicated that some of the recent demand growth was linked to precautionary buying behaviour as customers attempted to secure supplies ahead of expected price increases and potential supply disruptions.
Input cost inflation accelerated sharply during the month, reaching its highest level in nearly four years.
Companies also highlighted ongoing challenges stemming from geopolitical tensions, commodity price volatility, rising labour costs, tariffs and tax pressures.
Supply chains remained under strain in May, with average supplier delivery times lengthening significantly. Businesses linked delays to shipping disruptions associated with the conflict in the Middle East and restrictions affecting transit through the Strait of Hormuz.
The pressures prompted manufacturers to increase purchasing activity and build inventories. Input buying rose for the second consecutive month, while stocks of purchases recorded their fastest increase since July 2022. Finished goods inventories also increased slightly.
Manufacturers passed part of the higher cost burden onto customers, resulting in the fastest rise in selling prices since July 2022. Intermediate goods producers recorded the sharpest increase in output charges.
Despite cost pressures, business confidence strengthened to a three-month high. Nearly half of surveyed manufacturers expect output to rise over the coming year, supported by hopes of stronger demand, new product launches, export growth and improved geopolitical conditions.
Commenting on the survey findings, Rob Dobson, director at S&P Global Market Intelligence, said: “May saw the UK manufacturing upturn gather pace, as growth of production and business optimism both rose to three-month highs.
“The sustainability of the upturn remains in doubt, however. The recent upturn in new order intakes that is driving the expansion in output is heavily reliant on both manufacturers and their clients front-loading purchases to mitigate expected war-related price increases and supply chain disruption. This bounce will fade once customers have built up sufficient safety stocks.”
“These price and supply factors are also having a direct impact on manufacturers, with cost inflation rising to a near four-year high and pressure on supply chains leading to material shortages and longer lead times. This will continue to constrain manufacturers and put growth at risk for as long as geopolitical uncertainty, war in the Middle East and risks to key transport routes such as the Strait of Hormuz continues to pose a threat,” added Dobson.
Fibre2Fashion News Desk (SG)
