Latest construction activity from firms survey

S&P Global report shows construction activity still in decline

UK construction activity declined for the ninth consecutive month in September, albeit at a slower rate than in August and at the least marked level since June, according to the latest S&P Global UK Construction Purchasing Managers’ Index (PMI)⁽¹⁾.

The PMI, which tracks changes in the volume of business activity through a monthly survey of around 150 construction firms, registered 46.2 in September, up from 45.5 in August. Anything above 50 signifies an overall increase in activity; anything below 50 represents a decrease.

Low activity was mainly attributed to a lack of new project starts with survey respondents citing subdued demand, elevated business uncertainty and client hesitancy.

Order books decreased for the ninth consecutive month and business confidence was almost unchanged since the 32-month low seen in August.

Dr David Crosthwaite, BCIS chief economist, said: ‘The latest survey results are far from encouraging and once again highlight ongoing demand issues in construction. However, we know from BCIS forecasts that output growth is predicted in the new year.

‘What’s needed in the interim is more detail from the government on the private finance models it plans to use for projects in the Infrastructure Pipeline and for the government not to row back on upcoming projects in the Autumn Budget. This would help to stimulate the investment climate and improve the chances of demand and output picking up next year.’

At a sector level, declines in output were recorded across the board.

Civil engineering continued to be the weakest-performing sector in September but declined at a slower pace than in August.

A faster rate of decline was reported in commercial activity due to sluggish demand and market uncertainty while the residential sector saw the weakest fall overall.

Employment continued to decline in September for the ninth consecutive month.

Construction companies reported hiring freezes and the non-replacement of departing staff due to lower workloads although some noted a rise in apprentice recruitment.

S&P Global also reported:

• Slowest decline in total new work in 2025
• Solid fall in input buying for the tenth consecutive month
• Robust rise in purchasing prices alongside reports of elevated pay pressures and higher raw materials, energy and transport costs
• Improvement of supply conditions at a modest pace
• Around 33% of survey respondents expect business activity to expand in the year ahead; 12% forecast a decline

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^{(1) S&P Global UK Construction PMI  - here}