UK Manufacturing Production MoM: November 2025 Release Analysis
Table of Contents
The UK’s manufacturing sector contracted by -1.70% month-over-month (MoM) in November 2025, according to the latest data from the Sigmanomics database[1]. This decline is significantly worse than the -0.30% consensus forecast and reverses the modest 0.70% growth recorded in October. The November print is the largest monthly drop since March 2025, when production fell by -1.10%. Over the past 12 months, manufacturing production has averaged a subdued 0.10% MoM growth, reflecting ongoing headwinds.
Drivers this month
- Weaker demand from key export markets amid geopolitical tensions.
- Supply chain disruptions, particularly in intermediate goods.
- Energy price volatility increasing operational costs.
- Monetary tightening dampening investment and production incentives.
Policy pulse
The Bank of England’s recent interest rate hikes, aimed at curbing inflation, have tightened financial conditions. Manufacturing output’s sharp decline suggests that the sector is feeling the pinch, complicating the central bank’s inflation-growth balancing act.
Market lens
Immediate reaction: GBP/USD weakened by 0.40% within the first hour post-release, while 2-year gilt yields fell 5 basis points, reflecting increased growth concerns.
Manufacturing production is a core macroeconomic indicator, closely linked to GDP and employment. The November contraction contrasts with the 0.60% growth recorded in September 2025 and the 0.70% rise in October. Year-on-year (YoY), production growth remains muted at 0.30%, down from 1.20% in mid-2025. This slowdown coincides with rising input costs and subdued global demand.
Monetary Policy & Financial Conditions
The Bank of England’s policy rate currently stands at 5.25%, up from 4.50% six months ago. Tighter credit conditions have increased borrowing costs for manufacturers, reducing capital expenditure and inventory build-up. The sterling’s recent depreciation has partially offset cost pressures by improving export competitiveness but has not fully mitigated the downturn.
Fiscal Policy & Government Budget
Fiscal support measures, including targeted subsidies for green manufacturing and R&D tax credits, remain in place but have yet to stimulate a turnaround. The government’s budget deficit narrowed slightly in Q3 2025, limiting scope for additional stimulus.
External Shocks & Geopolitical Risks
Heightened geopolitical tensions in Eastern Europe and Asia have disrupted supply chains and dampened export demand. Energy price volatility, driven by global market uncertainty, has increased production costs, particularly in energy-intensive sectors.
Historical context shows that manufacturing production has struggled to regain momentum post-pandemic, with intermittent contractions in May (-0.80%), June (-0.90%), and September (-1.30%) 2025. November’s print continues this pattern of volatility, reflecting structural and cyclical challenges.
This chart signals a sector trending downward amid tightening financial conditions and external shocks. The sharp November decline suggests that the manufacturing cycle is in a contraction phase, raising concerns about broader industrial activity and GDP growth in Q4 2025.
Market lens
Immediate reaction: GBP/USD dropped 0.40%, UK 2-year gilt yields fell 5 basis points, and FTSE 100 futures declined 0.30%, reflecting investor caution on growth prospects.
Looking ahead, the UK manufacturing sector faces a complex outlook shaped by monetary policy, fiscal measures, and external risks. Three scenarios emerge:
- Bullish (20% probability): Supply chain normalization and easing geopolitical tensions support a rebound, with production rising 0.50–1.00% MoM by Q2 2026.
- Base (55% probability): Continued modest contraction or stagnation through early 2026, with production fluctuating between -0.50% and 0.20% MoM as monetary tightening weighs on demand.
- Bearish (25% probability): Prolonged global slowdown and energy price shocks deepen contraction, with production declining 1.50–2.00% MoM into mid-2026.
Structural & Long-Run Trends
Long-term shifts toward automation, green technologies, and reshoring could improve resilience. However, these structural changes require sustained investment, which may be constrained by current financial conditions.
Policy pulse
Monetary policy is likely to remain restrictive until inflation shows clear signs of easing. Fiscal policy may pivot toward targeted support if manufacturing weakness threatens broader economic stability.
The November 2025 manufacturing production MoM contraction of -1.70% highlights the sector’s vulnerability amid tightening monetary policy and external shocks. While fiscal support and structural reforms offer some hope, near-term risks dominate. Market sentiment reflects caution, with sterling and yields adjusting to the weaker data. Policymakers face a delicate balance between controlling inflation and supporting growth. Close monitoring of upcoming releases and global developments will be critical for assessing the sector’s trajectory.
Key Markets Likely to React to Manufacturing Production MoM
The UK manufacturing production data often influences currency, bond, equity, and commodity markets sensitive to economic growth signals. The following tradable symbols historically correlate with UK industrial activity:
- FTSE100 – UK blue-chip equity index, sensitive to domestic economic conditions and manufacturing output.
- GBPUSD – British pound vs. US dollar, reacts to UK growth data and monetary policy expectations.
- EURGBP – Euro vs. British pound, reflects relative economic strength between UK and Eurozone.
- BTCUSD – Bitcoin vs. US dollar, often moves inversely to risk sentiment tied to economic data.
- BA.L – BAE Systems plc, a major UK industrial stock sensitive to manufacturing and defense sector trends.
Extras: Manufacturing Production vs. FTSE100 Since 2020
Since 2020, UK manufacturing production MoM and the FTSE100 index have shown a moderate positive correlation (~0.45). Periods of manufacturing contraction, such as early 2023 and mid-2025, coincided with FTSE100 pullbacks of 3–5%. Conversely, manufacturing rebounds often preceded equity rallies, highlighting the sector’s role as a growth barometer.
FAQ
- What does the UK Manufacturing Production MoM report indicate?
- The report measures the monthly percentage change in the volume of goods produced by UK manufacturers, reflecting industrial activity and economic health.
- How does manufacturing production affect the UK economy?
- Manufacturing contributes significantly to GDP and employment; changes in production signal shifts in economic momentum and influence policy decisions.
- Why is the November 2025 manufacturing production decline significant?
- The -1.70% drop is the steepest in eight months, signaling increased economic headwinds amid monetary tightening and external shocks.
Final Takeaway
The sharp November contraction in UK manufacturing production underscores mounting challenges from tighter financial conditions and global uncertainties. While structural reforms and fiscal support offer hope, near-term risks remain elevated, warranting close monitoring of upcoming data and policy responses.
FTSE100 – UK blue-chip equity index, sensitive to domestic economic conditions and manufacturing output.
GBPUSD – British pound vs. US dollar, reacts to UK growth data and monetary policy expectations.
EURGBP – Euro vs. British pound, reflects relative economic strength between UK and Eurozone.
BTCUSD – Bitcoin vs. US dollar, often moves inversely to risk sentiment tied to economic data.
BA.L – BAE Systems plc, a major UK industrial stock sensitive to manufacturing and defense sector trends.
The November 2025 manufacturing production MoM figure of -1.70% marks a sharp reversal from October’s 0.70% and is well below the 12-month average of 0.10%. This drop is the steepest since the -1.10% contraction in March 2025, underscoring renewed sectoral weakness.
Compared to the prior six months, which saw three months of negative growth averaging -0.90%, November’s decline is more severe, highlighting intensifying pressures on UK manufacturing.