Commenting on the latest CIPS UK Manufacturing Purchasing Managers’ Index, which has increased to 49.7 in October, up from 46.2 in August, Mike Thornton, Head of Industrials at RSM UK, said: “While the uptick in manufacturing activity in October shows a reverse on the downward trend seen in August and September, only time will tell if this is a temporary rebound in output rather than a sustained recovery. Following Jaguar Land Rover’s phased production restart in October, it’s likely that this has created a ripple effect throughout the supply chain, particularly as the shutdown impacted over 5,000 middle market businesses.

“The impact of the restart will also likely be reflected in the increase to new orders, employment and output indices, as businesses look to address backlogs of work. However, there are wider signs of domestic improvement, with input prices dropping to their lowest level since December 2024, suggesting inflationary pressures are easing. This has offered some relief to manufacturers following months of price pressure.”

He added: “With growing speculation around the forthcoming Autumn Budget, our latest survey in partnership with Make UK revealed that frequent changes to tax policy are perceived as one of the biggest barriers to growth. Tax simplification is therefore a priority. With tax reliefs playing a key role in shaping investment decisions, the Chancellor must make them more accessible to unlock investment and spur innovation amongst middle market manufacturers – the engine room of long-term productivity and economic growth.”

Thomas Pugh, chief economist at RSM UK, said: “The rebound in the manufacturing PMI in October is good news for the industry and the wider economy. So far at least, the survey data has been surprisingly resilient to concerns about large tax rises in the upcoming budget, but we still doubt that the economy will do little more than stagnate in Q4.

“Meanwhile the drop in the input prices balance to its lowest level this year will be further evidence to the MPC that the disinflation trend is still intact. That won’t be enough to tempt the MPC into a rate cut on Thursday, but it does help open the door to a cut in December. The deciding factor will be whether the budget is deflationary or stagflationary.”

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