Thriving or Surviving? The Manufacturing Sector Health Check - January 2026

In last month’s edition of Thriving or Surviving, we saw some small hints that things were looking up for the manufacturing sector, according to data from the ONS. Let’s take a look and see how things are going as we enter 2026.

GDP (for November 2025)

Manufacturing GDP rose in November’s figures by 2.1 points to 102.7 – the prior month’s figures have been adjusted. The UK’s whole GDP rose just 0.4 points to 102.8 in November, barely outperforming a strong showing by the sector.

The three manufacturing sub-sectors showing largest growth were:

• Manufacture of transport equipment                                 10.7%
• Repair and installation of machinery and equipment        8.3%
• Manufacture of leather and related products                    4.7%

Employment and vacancies (for December 2025)

Paid employees in manufacturing stands at 2.3 million at the end of the year, which represents a year-on-year drop of 31,000 (1.3%). In comparison, the number of UK employees dropped 0.6% year on year to 30.23 million.

The number of manufacturing vacancies rose for the third month running – in December it was an increase of 1,000 (2%), compared to the 0.8% for the UK as a whole.

Year on year, manufacturing vacancies have dropped by 12.3%, compared to a drop of 8.9% for all sectors.

Wages and payroll (for November 2025)

Manufacturing mean pay fell slightly in November, with a 0.1% decrease – smaller than that of the UK overall which saw a 0.47% decrease.

UK aggregate pay decreased by 0.6% (£499.8m) in November to £102.3 billion per month. The manufacturing sector experienced a smaller decrease of 0.11%.

Exports and production (for November 2025)

Exports increased 2.9% in November, which is an improvement on last month’s decrease of 1.1%.

The three manufacturing sub-sectors which showed the largest export growth in November were:

• Manufacture of wood and products of wood and cork, except furniture                       46.7%
• Manufacture of soft drinks; production of mineral waters and other bottled waters    20.0%
• Manufacture of leather and related products                                                                   11.9%

UK production values (for November 2025)

The three sectors with the largest percentage of production value growth recorded for November were:

• Repair and maintenance of aircraft and spacecraft                         31.1%
• Building of ships and boats                                                                5.5%
• Manufacture of transport equipment                                                14.7%

Meanwhile, the three sectors showing the largest decrease in production value were:

• Cement, lime, plaster and articles of concrete, cement, and plaster              -16.5%
• Other manufacturing                                                                                           -14.1%
• Glass, refractory, clay, porcelain, ceramic, stone products                             -11.8%

Our take on the latest data

Manufacturing GDP growth (2.1 points) outpaced the UK total GDP growth (0.4 points) in November. Manufacturing recorded the highest GDP growth in November, followed by the Professional, Scientific and Technical activities category that encompasses engineering.

The number of paid manufacturing employees has fallen at a greater rate for the year than for the UK as a whole.

The number of employees in manufacturing fell again in December along with a small drop in mean wages, but vacancies continued to rise. With headcount down (‑0.4%) and vacancies up (+2% month on month), we’re seeing more of what we reckon is churn: firms are cautious on staffing up permanently, but still recruiting into specific roles.

Exports rebounded strongly in November, up by 2.9%.

Manufacturing remains in “surviving with selective strength” mode.  On balance, some headwinds persist like the declining number of jobs, and vacancies year on year. But there’s hope in countervailing positives such as month-on-month vacancies recorded, plus exports and GDP going up. The centre of gravity is stabilisation with localised momentum.

What’s your view on the latest data? Is the sector Thriving or Surviving? Get the latest data shares from our LinkedIn page.

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