UK manufacturing, September 2026: PMI rises to 51.9 as costs climb

This article is for owners and finance directors of manufacturing and engineering businesses who want to know how the sector is performing and what it means for investment and cash flow. Two recent surveys, the S&P Global UK Manufacturing PMI and the Make UK Manufacturing Outlook, give a mixed picture: growth, but with rising costs and cautious hiring. Below we set out the figures and the funding options for manufacturers. Smart Funding Solutions is a broker, not a lender: we compare whole-of-market options across 300+ lenders, arranging funding from £10,000 to £20 million.

01The September PMI

As Trading Economics reported on 1 October 2026, the final UK manufacturing PMI rose to 51.9 in September from 51.7 in August, a little below the flash estimate of 52.0. A reading above 50 means activity is growing.

• Output kept rising, although the flash survey suggested the increase was the slowest since April.
• New orders rose for a tenth month in a row.
• Costs climbed. Purchasing prices and transport costs rose, linked to higher diesel prices.

02The Make UK Manufacturing Outlook

The Make UK and S&W Manufacturing Outlook for the third quarter, published on 14 September 2026, found business confidence rising for the first time since the second quarter of 2025. Make UK upgraded its forecast for manufacturing output growth in 2026 to 1.2%, from 0.4%.

But the survey balances also showed growth cooling:

• The output balance fell from +26% in the second quarter to +10%, with +17% expected in the fourth quarter.
• The total orders balance fell from +18% to +13%.
• The employment balance fell from +15% to +3%.
• The UK prices balance was +30%, with +39% expected in the fourth quarter, so more firms expect to raise prices.

Fhaheen Khan, senior economist at Make UK, said "high employment, energy and regulatory costs are forcing firms to think twice before taking on new people", and that "our members can only grow and invest if the Autumn Budget brings those costs and burdens down."

03What it means for manufacturers

Orders are still growing, but margins are under pressure from fuel, energy and wage costs. Investment intentions rose in the third quarter, and new machinery is one way to raise output when taking on more staff is expensive. At the same time, rising input prices mean more cash is tied up in raw materials and stock before customers pay.

Firms waiting for the Budget before they commit can still prepare, by knowing what they could borrow and on what terms. Machinery often takes weeks or months to arrive, so finance agreed early can secure a delivery slot or a supplier's price before it rises again. See our Autumn Budget 2026 article and our article on what the Bank Rate decision means for business borrowing.

04Funding options for manufacturers

• Plant and machinery finance spreads the cost of new equipment, keeping cash free. Our guide to CNC machine finance covers one of the most common purchases.
• Asset refinancing releases cash from machinery you already own.
• Invoice finance releases cash tied up in customer invoices.
• Purchase order finance pays suppliers to fulfil a confirmed order.

Our manufacturing finance page brings these together, and there are dedicated pages for engineering firms and food manufacturers. Our guide to asset finance and capital allowances explains the tax side.

Orders are still growing, but margins are under pressure from fuel, energy and wage costs.

05What lenders look at for manufacturers

For machinery, asset finance providers look at the equipment itself as well as the business: its type, age, resale value and whether it can be moved and sold if needed. That is why new and well-known makes of machinery are usually easier to fund. For working capital, lenders look at your order book, your customers and how quickly they pay, and at your margins after the recent rise in energy and material costs. Recent accounts, management figures for the current year and a short explanation of what the investment will achieve, such as more output or lower costs per unit, all help an application. Existing finance agreements and any arrears will also be checked.

06How to compare your options

1. Cost the machinery or project, including installation and training.
2. Decide whether to fund the asset itself, your working capital, or both.
3. Have quotes from suppliers, recent accounts and your order book ready.
4. Use Instant Quotes to see your lender matches instantly, with no credit check.
5. Compare hire purchase and leasing on total cost, tax treatment and who owns the asset at the end.

Manufacturing is growing, but carefully. Get your Instant Quotes to see which lenders could fund your next investment. Lenders make every decision, and all finance is subject to status.