The UK construction industry suffered its sharpest downturn since the early months of the pandemic in November, according to the latest S&P Global UK Construction PMI survey. The headline PMI reading plunged to 39.4, dropping from 44.1 in October to reach its lowest level since May 2020, signalling a steep and accelerated fall in building activity.
All three monitored sub-sectors — residential, commercial and civil engineering — recorded the greatest drop in output for five-and-a-half years. Housing activity fell to 35.4, commercial work to 43.8, while civil engineering saw the most severe decline at just 30.0. Firms highlighted fragile market confidence, delays in project releases and a general lack of new work as key causes.
Demand conditions deteriorated sharply. Around 44% of surveyed companies reported a decline in new orders, compared with only 17% seeing an increase. Excluding the pandemic, November marked the fastest fall in new work since early 2009, driven by risk aversion among clients, caution over the UK’s economic outlook, and ongoing uncertainty in the run-up to the Budget.
Persistent weakness in workloads pushed the sector into further retrenchment on staffing. November registered the eleventh consecutive month of job cuts across construction, the steepest reduction since August 2020, as firms faced continued difficulty replacing completed projects. Subcontractor usage also declined as part of a year-long downward trend.
There were some operational relief points. Supplier performance improved solidly, reaching its strongest level since June 2024, amid softer demand that helped ease supply chain pressures. However, purchasing activity fell at the fastest rate in more than five years, reflecting the widespread drop in workloads. Meanwhile, input cost inflation accelerated — especially for electrical components, copper products and insulation — though price pressures remained well below long-run averages.
Forward-looking sentiment has also dimmed. Just 31% of construction firms expect a rise in business activity over the next 12 months, only narrowly exceeding the 25% predicting a decline. November’s reading represented the weakest level of optimism since December 2022, weighed down by planned investment cutbacks and broader concerns over long-term UK growth prospects.
A Sector Awaiting a Turning Point
With activity now falling for eleven straight months, the industry enters 2026 seeking signs of stabilisation. Hopes for a rebound rest in part on the potential for lower borrowing costs to reinvigorate construction pipelines — but until confidence recovers, the sector remains stuck in its most prolonged downturn since the financial crisis era.
Read the full report: https://www.pmi.spglobal.com/Public/Home/PressRelease/52b275735e86497fa939b995db8961da
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