UK construction industry declines at slowest rate for eight months

The UK’s construction sector declined at its slowest pace since January last month as it edged closer to recovery, according to new figures.

The closely-followed S&P Global UK construction PMI showed a reading of 46.1 in September, improving from 44.3 in August.

It marked the strongest industry performance for eight months.

Any reading above the 50.0 threshold indicates activity in the industry is increasing, while anything below means it is contracting.

The latest figures show the industry remained firmly in the contraction territory having been declining since January 2025, but at a slower pace than in recent months.

It was also significantly stronger than the 44.9 level expected by a consensus of economists.

Experts said the reduced downturn was linked to improvements across all parts of the sector.

Tim Moore, economics director at S&P Global Market Intelligence, said: “All three construction sub-sectors have seen a degree of stabilisation relative to the rapid declines reported in the second quarter of 2026.

“In September, commercial building work saw its smallest fall in activity since May 2025.

“House building was again the weakest performer as rising borrowing costs and unfavourable market conditions weighed on output.”

Mr Moore said new orders were however “relatively subdued” for the month as clients deferred decision-making on major projects.

This was largely linked to subdued demand and geopolitical tensions.

Firms also highlighted some inflationary pressure, with around 25% of those surveyed reporting a rise in their purchasing costs, with fuel surcharges, higher freight costs and rising raw material prices all noted.

Reduced workloads also resulted in another month of job cuts, with employment reducing each month since January 2025.

Carly Thorpe, construction and engineering partner at Walker Morris, said: “The modest improvement in September’s PMI reflects a combination of stronger civil engineering activity and favourable operating conditions, with a drier-than-average September likely helping to maintain productivity on site.

“The figures also reinforce the ongoing shift in market activity away from residential development and towards infrastructure-led sectors, including transport, energy and data centres, where investment and project pipelines remain stronger.”