UK construction slump eases as July PMI reaches four-month high
UK construction activity contracted for a seventh straight month in July, although the pace of decline eased to its slowest since March as new orders showed signs of stabilising and business confidence improved, survey data from S&P Global showed on Thursday.
The S&P Global UK construction purchasing managers' index rose to 44.7 points in July from 38.4 in June, its highest level in four months, but remained below the 50.0 threshold that separates growth from contraction. It beat the FXStreet-cited consensus of 41.5 points.
All three main areas of construction recorded slower declines in activity. Commercial work proved the most resilient with an index reading of 46.8 points, while housebuilding fell at its slowest pace since October 2025 at 41.8. Civil engineering remained the weakest segment with a reading of 38.3.
New orders declined for a seventh consecutive month, but at the weakest rate since September 2025, with firms reporting signs of a recovery in tender opportunities across commercial developments, residential projects and transport infrastructure. However, many also cited geopolitical uncertainty and subdued domestic economic conditions as weighing on demand.
Employment fell at the slowest pace since February, while purchasing activity continued to decline, albeit at the weakest rate in 10 months. Supplier performance improved for the first time in five months as softer demand for materials and fewer transport delays eased pressure on supply chains.
Input cost inflation slowed for a second consecutive month to its weakest level since February, although firms continued to report higher fuel surcharges and raw material costs linked to the Middle East conflict.
S&P Global Market Intelligence Economics Director Tim Moore said: "July data suggests that the performance of UK construction sector has started to stabilise after a sharp downturn throughout the second quarter of 2026."
On Wednesday, S&P Global data showed the UK services PMI business activity index rose to 52.1 points in July from 48.8 in June, while the UK composite PMI output index, which combines manufacturing and services, increased to 52.2 points from 49.3.
On Monday, S&P Global reported that the UK manufacturing PMI slipped to 51.9 points in July from 52.5 in June.
The S&P Global UK Construction PMI is compiled from responses to questionnaires sent to a panel of around 150 construction companies. Survey responses were collected between July 9 and 30.
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