UK manufacturing has entered 2026 with clearer signs of recovery, as output and new orders both moved back into growth.
Production increased at the fastest pace for several months, supported by a renewed rise in total new work. Crucially, export orders returned to expansion after an extended spell of weakness. The rebound in new orders has allowed companies to lift output and stabilise their order books. While overall growth remains moderate rather than rapid, the change in direction is significant. It suggests that the inventory correction phase seen across supply chains may be largely complete.
Cost pressures remain part of the operating backdrop, but there are signs that inflationary strains are easing. Input costs continue to rise, particularly for labour, yet the pace of increase has moderated compared with previous peaks. Output price inflation is also less intense. This combination is relevant for margin analysis. If demand continues to firm while cost growth stabilises, manufacturers could see incremental margin recovery, especially those with disciplined pricing strategies and operational efficiency.
Likewise Group PLC (LON:LIKE) is a distributor of floorcoverings and matting and has the opportunity to consolidate the domestic and commercial floorcovering markets to become one of the UK’s largest distributors in this sector.
