UK manufacturing output rises despite inflation and workforce pressures

UK manufacturing output increased by 1.4% over the last 12 months, reaching £159.4 billion during the first quarter of 2026, highlighting continued resilience across several key industrial sectors despite ongoing economic and geopolitical pressures.

The latest figures show that manufacturing output rose by approximately £2.2 billion year-on-year, although inflationary pressures meant overall productivity declined by around 1% once price increases were taken into account.

One of the strongest-performing sectors was aerospace manufacturing, including aircraft, spacecraft and related machinery production, which recorded a 12.1% increase in output compared with the same period last year. The sector generated £8.6 billion during the first three months of 2026, reflecting growing global demand and continued investment in high-value engineering and defence programmes.

Food manufacturing also delivered strong growth, increasing by 2.7% year-on-year, while the value of computer, electronic and electrical product manufacturing rose by 3.4%. Textile, apparel and leather production also posted modest gains alongside continued growth in chemicals, pharmaceutical preparations, alcohol and tobacco manufacturing.

Despite wider industrial growth, the UK automotive sector experienced a more difficult start to 2026. Output from motor vehicle and trailer manufacturing fell by 3.3% compared with the first quarter of 2025, representing a decline of approximately £715 million year-on-year. However, the sector still showed signs of short-term recovery, producing more than £2 billion additional output compared with the final quarter of 2025.

Manufacturers involved in coke and refined petroleum products experienced one of the sharpest declines, with output falling by 12.2%. The sector has been heavily impacted by rising energy prices and instability in global oil markets, particularly following increased tensions in the Middle East, which contributed to a significant rise in crude oil prices.

The latest figures also indicate that around 50,000 fewer people are currently employed within UK manufacturing compared with a year ago. However, output per worker has increased by approximately 3%, suggesting manufacturers are continuing to invest in efficiency improvements, automation and smarter production strategies to offset labour shortages and rising operational costs.

Industry analysts believe the figures highlight both the resilience and challenges currently facing UK manufacturing. While many sectors continue to grow, rising energy prices, inflationary pressures and workforce constraints remain significant concerns for manufacturers across the country.

At the same time, the data points towards a growing emphasis on productivity, digitalisation and operational efficiency as manufacturers look to strengthen long-term resilience and maintain profitability in an increasingly competitive global market.