UK manufacturing confidence is rising, but hiring remains selective

The latest UK Manufacturing PMI makes one thing clear. Manufacturing has started 2026 with renewed momentum, with output, new orders and export demand all moving in the right direction. Confidence is now at its highest level in 17 months.

Yet beneath the headline optimism, the labour market tells a more nuanced story. For employers and candidates alike, this is not a return to volume hiring. It is a shift towards targeted, value-driven recruitment.

Growth is back, but it is uneven

Manufacturing activity is expanding for a third consecutive month, driven primarily by larger organisations and investment goods producers. Export demand has returned for the first time in four years, particularly from Europe, the US and China.

This matters for the South West and wider UK economy. Regions with strengths in advanced engineering, precision manufacturing and export-led production are better placed to benefit from this recovery.

However, SMEs continue to face pressure. Many are still reducing headcount, managing excess capacity and operating cautiously in the face of cost inflation and geopolitical uncertainty.

What we are seeing in the recruitment market

From a recruitment perspective, the data aligns closely with what we are seeing on the ground.

Hiring intent has improved, but it is focused. Employers are prioritising:

• Engineering and technical leadership roles
• Operations, supply chain and procurement expertise
• Commercial and export-facing capability
• Interim and contract appointments to manage risk

Replacement hiring remains more common than expansionary recruitment, particularly among small and mid-sized manufacturers. Larger firms, by contrast, are beginning to invest again in skills that support productivity, resilience and international growth.

Cost pressure is shaping hiring decisions

Rising input costs, wage pressures and increased employer National Insurance contributions are influencing recruitment strategies. Many organisations are asking a harder question: how do we achieve more with a leaner, more skilled workforce?

This is driving demand for candidates who can deliver operational improvement, process efficiency and strategic oversight rather than simply scale teams.

Why specialist recruitment matters more than ever

In a market like this, recruitment is less about volume and more about precision. Businesses cannot afford hiring mistakes when margins are tight and uncertainty remains.

Partnering with a specialist recruiter who understands sector dynamics, regional labour markets and senior appointments is increasingly critical. The right hire now has a disproportionate impact on performance over the next 12 to 24 months.

Looking ahead

Manufacturing confidence has returned, but the recovery is fragile. Employers that invest thoughtfully in people, skills and leadership will be best placed to capitalise on improving demand.

For candidates, this is a market that rewards depth, adaptability and commercial awareness. For employers, it is a time to hire with intent, not haste.

At Cathedral Appointments, we continue to work closely with organisations across the South West and the UK to support strategic recruitment decisions in manufacturing, engineering and professional services.