Source: Sharecast
The S&P Global UK manufacturing PMI rose to a three-month high of 46.4 last month, from 45.4 in April and above the flash estimate of 45.1.
However, the sector remains in contraction. A reading above the neutral 50.0 benchmark indicates growth but one below it suggests contraction.
Total new business volumes also decreased for the eighth consecutive month, amid what S&P Global said was a "general reluctance" by clients to commit to new contracts.
Cost pressures also increased following changes to employer National Insurance contributions, which came into effect in April.
However, while business optimism remained subdued, there were signs that conditions were starting to improve, with both output and new orders tracking higher.
Rob Dobson, director at S&P Global Market Intelligence, said: “UK manufacturing faces many challenges, including the turbulent market conditions, trade uncertainties, low client confidence and rising tax-relate wage costs.
"Smaller manufacturers are experiencing the sharpest pinch, registering the steepest retrenchments in output and demand and seeing their confidence slump to a near record low.
"There are some signs of manufacturing turning a corner… [but] trading conditions remain turbulent both at home and abroad."
The PMI is compiled from responses sent to purchasing managers working at a panel of around 650 manufacturing companies. Data were collected between 12 and 27 May.