UK construction output falls at fastest pace in five years

UK construction activity fell at its fastest rate in more than five years in October, according to the latest S&P Global UK Construction Purchasing Managers’ Index (PMI).

The headline PMI reading dropped to 44.1, down from 46.2 in September and well below the 50.0 threshold that separates growth from contraction. It marks the tenth consecutive month of decline, the longest period of continuous downturn since the global financial crisis.

Civil engineering was the weakest-performing segment (index 35.4), followed by residential building (43.6), which saw its sharpest fall in eight months. Commercial work proved more resilient, registering 46.3 — little changed from September.

S&P Global said firms widely reported a lack of new projects and a sluggish flow of tender opportunities, with client confidence held back by political and economic uncertainty.

Workforce cuts also accelerated. Staffing levels fell at their fastest rate since August 2020, as companies refrained from replacing leavers and reduced subcontractor use. Meanwhile, input demand and purchasing volumes fell sharply, helping ease supply chain pressures.

On the positive side, input cost inflation moderated to its lowest level in 12 months, while supplier performance improved for a third consecutive month.

Tim Moore, economics director at S&P Global Market Intelligence, said: “UK construction companies reported another challenging month in October as the prolonged weakening of order books resulted in the fastest decline in business activity for over five years. Civil engineering and residential work saw the sharpest contractions, while commercial building showed some resilience.”

Despite the downturn, optimism edged up slightly to its highest level since July, supported by hopes of lower borrowing costs and new energy infrastructure spending in 2026.

The PMI survey, which tracks changes in activity across around 150 UK construction companies, provides an early indicator of sector performance and is closely watched as a barometer of economic confidence and investment sentiment.

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The S&P Global UK Construction PMI fell to 44.1 in October, signalling the steepest decline in industry activity since May 2020.