UK construction output continued to shrink in September \u2013 but the rate of decline was the slowest since January, according to the latest Purchasing Managers\u2019 Index (PMI) from S&P Global.<\/p>\n
PMI output in September picked up to 46.1 from 44.3 in August, the softest fall in output volumes for eight months. Any score below 50 indicates a contraction in activity.<\/p>\n
S&P Global\u2019s UK Construction PMI<\/a> has been below 50 for every month since January 2025, the longest continuous stretch of decline since the 2008 global financial crisis.<\/p>\n Slower rates of contraction were seen across all three main divisions within the construction sector, S&P Global said.<\/p>\n Commercial work saw the greatest improvement at 48.5, the smallest fall in activity since May 2025, while civil engineering rose to 42.2 from 40.5 in August.<\/p>\n Housebuilding remained the weakest performer in the construction sector at 40.7. This still represents an improvement from 37.6 in August.<\/p>\n \u201cAll three sub-sectors have seen a degree of stabilisation relative to the rapid declines reported in the second quarter of 2026,\u201d said Tim Moore, economics director at S&P Global Market Intelligence.<\/p>\n Many of the PMI\u2019s survey respondents \u2013 which included 150 UK construction companies \u2013 linked lower output to sluggish market conditions as a result of geopolitical tensions and elevated borrowing costs.<\/p>\n New work received by construction firms during September saw its fastest contraction rate since June, with respondents often noting headwinds from delayed decision-making on major projects and sharply rising input costs.<\/p>\n Moore said: \u201cLatest data indicated that overall input price inflation softened for the fourth month in a row, but this trend seems unlikely to endure given recently escalating fuel prices and transportation costs.\u201d<\/p>\n Reduced workloads resulted in another month of job cuts across the construction sector, S&P Global noted. Lower employment has been recorded each month since January 2025, and the latest fall was the fastest in five months.<\/p>\n The latest survey also pointed to a renewed decline in subcontractor usage.<\/p>\n Meanwhile, demand for construction products and materials fell briskly in September, a downturn that began in December 2024. Suppliers\u2019 delivery times lengthened for the second month running and to the greatest extent since May.<\/p>\n Survey respondents attributed worsening vendor performance to international shipping delays and ongoing supply chain disruption related to the Middle East conflict.<\/p>\n Average cost burdens, meanwhile, increased sharply in September, but the rate of inflation moderated to a seven-month low.<\/p>\n Looking ahead, the PMI survey showed that 31 per cent of respondents expect a rise in business activity in the next 12 months, whereas 21 per cent predicted a decline.<\/p>\n \u201cSofter order books, elevated inflationary pressures and concerns about rising borrowing costs were all reasons for construction companies to moderate their year-ahead growth expectations during September,\u201d Moore said.<\/p>\n \u201cThis led to a sharp drop in business optimism to its lowest since May.\u201d<\/p>\n Max Jones, director of infrastructure and construction at Lloyds, said that many construction companies are seeing longer-term opportunities emerge through planned investment in infrastructure-led sectors, including transport and energy.<\/p>\n \u201cThe upcoming Budget will be an important moment for the sector,\u201d Jones added. \u201cFirms are looking for consistency on long-term infrastructure commitments, providing them with the confidence they need to plan ahead.\u201d<\/p>\n Data centres<\/a> will also form an important work pipeline for construction companies in the ongoing shift in market activity away from residential development, added Carly Thorpe, construction and engineering partner at Walker Morris.<\/p>\n \u201cWhile these projects can be controversial and often raise concerns around energy use and local impact, they are becoming an increasingly important part of the UK\u2019s future development pipeline,\u201d Thorpe said.<\/p>\n This is broadly in line with global construction trends, where confidence has fallen sharply over the past year amid increasing cost pressures, supply chain disruption and persistent geopolitical instability, according to a new report<\/a> by cost consultant Currie & Brown.<\/p>\n","protected":false},"excerpt":{"rendered":"UK construction output continued to shrink in September \u2013 but the rate of decline was the slowest since…\n","protected":false},"author":2,"featured_media":793827,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[84,1294,56,54,55],"class_list":["post-793826","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy","tag-uk","tag-united-kingdom","tag-unitedkingdom"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/793826","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=793826"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/793826\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/793827"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=793826"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=793826"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=793826"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}