UK construction companies signalled a sharp and accelerated reduction in business activity during October. At 43.6, down from 46.1 in September, the headline seasonally adjusted S&P Global UK Construction Purchasing Managers’ Index registered below the neutral 50.0 value for the twenty-second month running. Moreover, the rate of contraction was the steepest since June.
Residential activity (index at 35.1) was by far the weakest-performing segment, with the latest reading the lowest since December 2025 and indicative of a steep drop in house building. Anecdotal evidence cited low consumer confidence, elevated risk aversion and headwinds from rising borrowing costs. Civil engineering work (45.9) decreased in October, but the pace of contraction was the slowest since May 2025. Commercial activity (46.3) also showed some resilience, although the latest reading eased from September’s 16-month high.
Total new work received by construction companies fell at the sharpest pace since June, reflecting subdued market conditions and fragile customer demand. However, there were some reports of improved order books due to higher infrastructure spending.
The proportion of construction companies expecting an increase in their output levels during the year ahead (34%) exceeded those forecasting a decline (27%) by only a narrow margin. This signalled the lowest net sentiment towards the business outlook since May.
Tim Moore, Economics Director at S&P Global Market Intelligence, said: “October data indicated a setback for the UK construction sector after some signs of stabilisation in the previous month. Construction companies commented on severe headwinds in the house building sector from rising borrowing costs, weak consumer confidence, and elevated economic uncertainty. However, there were reports of strong demand for data centre projects, alongside rising workloads in the energy and utilities sectors. Resilient infrastructure spending contributed to the slowest fall in civil engineering activity since May 2025.
“Faced with rising input price inflation, higher borrowing costs, and reduced order books, construction firms were unsurprisingly cautious about the year ahead business outlook. The degree of optimism towards activity growth eased again in October and now sits at one of the lowest levels since the end of 2022.”
Source: https://www.pmi.spglobal.com