UK Construction Activity Falls Less than Expected

The S&P Global UK Construction PMI rose to 45.6 in March of 2026 from 44.5 in the previous month, stretching the streak of over one year in monthly contractions for the sector, but above the median market consensus of 43.9. The survey indicated that operating margins remained under pressure in the period due to a sharp acceleration in input cost inflation. Companies noted that the outbreak of war in the Middle East increased prices of energy and raw materials used in projects. Residential housing activity declined further with an index of 38.2, while civil engineering activity (44.8) and commercial construction (47.1) contracted at slower paces. Looking ahead, confidence continued to fall, although companies were confident in more orders from clients in the energy sector.

The S&P Global UK Construction PMI fell to 44.5 in February of 2026 from 46.4 in the previous month, contrasting with expectations that it would improve slightly to 47 to reflect a deeper contraction in the British construction activity. Firms surveyed reported lower levels of new orders, magnifying the impact of new project starts amid low demand from clients and bad weather on sites. Residential building construction declined at the fastest pace among activity groups, followed by civil engineering output and commercial space construction, which also dropped sharply. Still, business confidence improved to its highest since December of 2024, with the panel expecting new contract wins and a turnaround in economic conditions.

The S&P Global UK Construction PMI rose to 46.4 in January 2026, rebounding from December’s five-and-a-half-year low of 40.1 and exceeding market expectations of 42.0. While this marked the strongest reading since June 2025, the index signaled a continued contraction in construction activity. House building was the weakest-performing segment, although the rate of decline eased to its slowest pace in three months. Civil engineering activity also contracted sharply, while commercial construction showed the smallest decline since May 2025, as some firms cited improved post-Budget clarity and a modest recovery in investment sentiment. Total new orders fell at the slowest rate in three months, suggesting early signs of stabilization, though employment continued to decline at a marked pace. On the cost side, input price inflation accelerated to a four-month high. Business optimism improved to its strongest level since May 2025, but confidence remained well below its long-term average.