UK Construction PMI Rebounds from Multi-Year Low

The S&P Global UK Construction PMI rose to 44.7 in July of 2026 from 38.4 in the previous month, extending the rebound from the six-year low of 38.2 in May to reflect some consolidation since the outbreak of war in the Middle East negatively impacted the sector. Commercial work was the subsector that slowed the least, followed by house building activity and civil engineering activity. Aggregate new business received by construction companies fell at a slower pace from June amid a turnaround in tender opportunities. While energy and raw material cost inflation softened from the earlier, improving signs in the Middle East allowed for a pickup in orders. Consequently, employment also fell at a softer pace. Looking ahead, a larger portion of surveyees predicted business expansion in the coming months than those anticipating a decline.

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.