UK factories hired at their fastest pace for two years in August. Most of the new work went to bigger manufacturers. Small firms stayed weak, in the same survey and the same month.
The S&P Global UK Manufacturing PMI, the monthly survey of factory managers, came in at 51.7 for August 2026. That is down from 51.9 in July and the weakest reading since March. It was still revised up from an early estimate of 51.5. Anything above 50 means the sector grew.
01The split inside the headline
Output rose for a fifth month running, though at the slowest rate since April. New orders came in from both UK and overseas customers.
According to S&P Global, those order gains were concentrated among medium and large manufacturers, while weakness among smaller firms continued. July told the same story. Production fell at small-scale manufacturers that month and grew at medium and large ones.
Two months is not a trend on its own. It is worth watching if you run a small plant.
02Confidence is up, investment is not
The mood is better than the headline suggests. Business confidence hit a six-month high, with around half of the firms surveyed positive about the next 12 months. Cost pressure eased too, with purchase price inflation at a six-month low.
Spending has not followed. According to the British Chambers of Commerce, UK business investment is forecast to fall 0.2% in 2026, then grow 0.4% in 2027. The BCC raised its 2026 growth forecast to 1.0% on 1 September, up from 0.9%.
So orders are there and firms feel better about the year ahead. Very few are putting money into extra capacity.
03Why the gap is usually about cash
A small manufacturer pays for steel, timber or components before the customer pays anything. The days between those two events are what decide whether a bigger order is worth taking.
Larger firms cover that gap with an agreed overdraft and supplier credit. Smaller ones often cannot, so they take the work slowly or turn it down.
There are several ways to bridge it, and the right one depends on the job. We have set out the options, and the four numbers to check first, in our guide to working capital for small manufacturers.
