Polls find that factories are in an upbeat mood despite fears over the economic impact of the U.S. war on Iran.
According to a leading survey of the industry, British manufacturers ramped up production in July ’26 for the fourth consecutive month. This was at the fastest pace in almost two years.
The S&P Global poll of manufacturers found that most manufacturers were in an upbeat mood during July ’26. They were yet anxious about the prospect of a long war in the Middle East that may block supplies of oil & gas and increase the cost of production.
Uncertainty on the outcome of the war meant the S&P Global Purchasing Managers’ Index (PMI) dipped in July. However, it sustained a run of 9 months of expansion. The PMI, which tracks activity in the sector, declined to 51.9 in July, down from 52.5 a month before in June. This was despite the increase in manufacturing output growth. A reading above 50 denotes an expansion period.
These figures come after a torrid two years for the manufacturing sector. The increase was after the U.S.’s liberation day tariffs, which took effect during spring last year. The sector received a 2nd big blow last autumn when a hack of the supporting IT system at Jaguar Land Rover brought production at Britain’s largest car manufacturer to a halt.
This report added that the latest production increase was strongly linked to increasing intakes of new business from both domestic and export clients.
Total new orders increased for the eighth successive month. This was with some enterprises noting an improvement in the functioning of global supply chains. This improvement was after the chaos caused by the U.S. tariffs during ’25.
The report also said that new export orders flowed in from the U.S., Canada, the EU, mainland China, and India, besides South Korea.
The report further stated that recovery has led to a small increase in employment. The future’s uncertainty dragged on the labor market during July. However, staffing levels increased for the fourth successive month.
