The UK’s manufacturing sector returned to growth in October, boosted by the reopening of Jaguar Land Rover plants and stronger consumer spending, according to new data.
A closely watched survey by S&P Global found that British factories recorded their best performance in a year, signalling a tentative recovery after months of stagnation. The Purchasing Managers’ Index (PMI) rose sharply to 49.7, up from 46.2 in September — just shy of the 50 mark that separates contraction from expansion.
Jaguar Land Rover leads rebound after cyber-attack
Britain’s biggest carmaker, Jaguar Land Rover (JLR), played a key role in lifting output after restarting operations hit by a major cyber-attack earlier this year. The disruption had been estimated to cost the UK economy nearly £1.9bn.
With production resuming, the automotive industry sent ripples of demand through the supply chain, benefiting thousands of smaller firms that provide components and services to JLR. The survey’s sub-index of factory output jumped to 51.6 from 45.7, marking a return to expansion.
Exports and consumer demand drive optimism
Manufacturers also benefited from a pick-up in car sales and improved consumer sentiment. Rising real wages helped to support domestic demand, while a weaker pound boosted export competitiveness, analysts said.
“Rising real wages should underpin demand for goods, while government incentives for green technologies and battery production could boost investment,” said Martin Beck, chief economist at WPI Strategy.
He added that the government’s decision to increase electricity discounts for energy-intensive industries would help manufacturers struggling with high costs.
Analysts warn rebound may be short-lived
Despite the positive signs, some industry experts urged caution. Mike Thornton, head of industrials at RSM UK, warned that the October rebound may prove temporary.
“While this uptick shows a reversal of recent declines, only time will tell if it’s a sustained recovery,” he said. “JLR’s restart likely created a ripple effect across the supply chain, especially as the shutdown affected over 5,000 mid-sized businesses.”
The UK’s manufacturing base has endured years of strain from the pandemic, soaring energy prices, and higher labour costs. Industry groups including the CBI, British Chambers of Commerce, and Make UK have urged the government to prioritise support for factories in the upcoming budget on 26 November.
Business confidence improving but still fragile
Rob Dobson, director at S&P Global Market Intelligence, said that while optimism had risen to an eight-month high, manufacturers remained cautious about policy and global conditions.
“There are concerns the forthcoming budget could worsen challenges created by last year’s fiscal measures, particularly around the national minimum wage and employer National Insurance,” he said.
“Manufacturers appear stuck in a holding pattern, waiting for greater clarity on domestic policy and the wider geopolitical situation.”
