UK Construction PMI Rebounds from Multi-Year Low

The S&P Global UK Construction PMI edged up to 38.4 in June 2026 from 38.2 in May, below market expectations of 40 although business sentiment is highest since March. Commercial construction proved the most resilient, while housebuilding and civil engineering weakened sharply. New work declined, driven by fewer housebuilding projects, weak business investment, and intense competition for contracts, despite stronger opportunities in the defence and energy sectors. Employment fell for the 18th consecutive month, alongside a sharp reduction in subcontractor use. Softer demand eased supply chain pressures, with fewer delivery delays and higher inventories, although supplier performance deteriorated from March. Cost pressures intensified due to higher raw material, wage, and transport costs. Looking ahead, 38% of firms expect activity to increase, compared with 19% anticipating a decline, supported by upcoming public and infrastructure projects.

The S&P Global UK Construction PMI fell to 38.2 in May 2026 from 39.7 in April, missing market expectations of 40.2 and signaling the sharpest contraction in construction activity since May 2020. Housing remained the weakest-performing segment, while commercial and civil engineering also declined amid client caution linked to inflation and geopolitical tensions. New orders fell at the fastest pace in six years as project delays, deferred investment decisions, and budget cuts weighed on demand. Consequently, employment and purchasing activity continued to decline. On the price front, input cost inflation accelerated to its highest level since June 2022, driven by higher fuel and transport costs. Supplier delivery times also lengthened at the fastest pace since December 2022 amid shipping delays and material shortages. Meanwhile, business confidence remained positive but eased to one of its weakest levels since late 2022 amid concerns over inflation, borrowing costs, and the outlook.

The S&P Global UK Construction PMI sank to 39.7 in April of 2026 from 45.6 in the previous month, well below market expectations of 45.7 to deepen the streak of 16 consecutive contractions. The data reflected the early impact of surges in energy prices due to the war in the Middle East, which halted exports of oil and refined products. Firms noted subdued demand, with geopolitical uncertainty driving clients to delay committing to projects and soften the announcement of new tender opportunities. Consequently, constructors lowered their staffing levels in the period. On the price front, fuel surcharges drove a majority of surveyees to report higher input prices, which rose at the sharpest rate since June 2022. The deterioration in activity was the sharpest for civil engineering activity, followed by residential construction and commercial construction.