Manufacturing production increases after JLR factory restart

Manufacturing production increased for the first time in a year last month after a boost from restarts at Jaguar Land Rover (JLR) factories following its cyber attack, according to new figures.

Overall activity in the UK manufacturing sector was still in decline, but it reported that its recent slowdown significantly eased during the month.

The S&P Global UK manufacturing PMI survey, watched closely by economists, showed a reading of 49.7 in October, improving from 46.2 in September.

Any reading above 50 indicates that activity is growing while any score below means it is contracting.

Industry data signalled that production volumes were particularly stronger in the consumer and intermediate goods industries.

This included improvements for some manufacturers linked to the automotive industry who were buoyed by the phased restart of production at JLR.

The company restarted production at all factories, including sites in Solihull and Halewood, in mid-October following a shutdown after the firm’s systems were hacked on August 31.

Rob Dobson, director at S&P Global Market Intelligence, said this will therefore “provide only a temporary spike in production”.

He added: “The October PMI survey shows UK manufacturing production rising for the first time in a year, which is a positive in itself.

“However, there are real concerns that the bounce could prove short-lived.

“Sluggish demand from both domestic and overseas markets meant October’s output growth was dependent on firms eating into backlogs of orders placed in prior months and allowing unsold stock to accumulate.”

Firms indicated that “tough” market conditions contributed to the dip in both domestic and overseas demand.

New export orders declined for the 45th consecutive month amid reports of weak demand from the US, EU, Asia and the Middle East as tariff uncertainties continue to press on businesses.

Manufacturing firms, which account for about 9% of the UK economy, also pointed towards subdued UK demand amid caution ahead of the autumn Budget, with concerns over potential tax announcements.

Employment contracted for the 12th consecutive month as manufacturing firms sought to control costs.

Elliott Jordan-Doak, senior UK economist at Pantheon Macroeconomics, said: “We think a good chunk of the jump in the PMI in October reflects the resumption of car production following the JLR cyber attack.

“Bottom line, a reopening of business will always boost growth temporarily, so we take the one-year high in the manufacturing PMI with a pinch of salt.

“We think activity will struggle in the coming months as tariff ructions continue to hit global trade.”