From Recovery to Opportunity: Why 2026 Could Be a Big Year for Engineering Talent

In a recent article from S&P Global, the latest UK Manufacturing PMI data revealed further signs of recovery in November. The headline PMI climbed to 50.2, up from 49.7 in October, marking the first return to growth territory since September 2024. This follows a challenging period for the sector, with new business volumes stabilising after more than a year of decline and domestic demand providing a welcome boost.

The report highlighted that output growth was modest and largely driven by investment goods, while consumer and intermediate goods production continued to experience contractions. Larger manufacturers outperformed SMEs, and although export orders remain weak, the rate of decline eased to a 12-month low. Business sentiment also strengthened, with 56% of firms expecting higher output in the year ahead. Factors contributing to this optimism include market stabilisation, new product launches, and increased adoption of technologies such as AI and data-centre investments.

Despite the positive indicators, the sector continues to face challenges. Employment fell for the 13th consecutive month, reflecting cost-cutting measures, recruitment freezes, and the higher costs associated with National Minimum Wage and employer National Insurance contributions. Supply chains also came under strain, with capacity shortages, transport disruption, and port delays affecting vendor performance. Factory gate prices fell for the first time in over two years, and input cost inflation slowed to its weakest level since October 2024, putting additional pressure on margins, especially for SMEs.

Phil Walker, MD of Precision People, who has over 21 years’ experience in engineering recruitment in the East Midlands, shared his perspective on the data:

“The latest PMI data shows UK manufacturing edging back into growth territory — a welcome boost after a tough year. Domestic demand is stabilising, and businesses are feeling more confident about 2026.

Having worked in engineering recruitment in this region for over two decades, it’s clear that uncertainty around government policy continues to frustrate manufacturers. The good news is that with Precision’s mix of temporary, permanent, and executive search services, we can help clients stay agile and seize opportunities, whatever the broader policy environment throws at them.

The takeaway? 2026 is shaping up to be a year of opportunity, and having the right people in place will make all the difference.”

For manufacturers, the key message is that while the market is recovering, flexibility and preparation are essential. Investing in people and technology, particularly in areas like AI and process improvement, can drive productivity and competitiveness. By keeping staffing options open — whether through temporary roles to meet short-term demand, permanent hires to build long-term capability, or executive search to strengthen leadership — businesses can position themselves to capitalise on the green shoots of growth and navigate the ongoing uncertainty in government policy and global trade.

As we head into 2026, cautious optimism paired with strategic workforce planning could be the difference between merely surviving and truly thriving in the UK manufacturing sector.

Reference: S&P Global UK Manufacturing PMI, November 2025.

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