S&P Global UK Construction PMI rose to 44.7 in July, its highest reading in four months
UK construction output continued to contract in July but at a markedly slower rate than in previous months, according to the latest S&P Global UK Construction PMI data.
The headline index rose to 44.7 from 38.4 in June — its strongest reading since March — though it remained below the 50.0 threshold that separates growth from contraction. Business activity has now declined for every month since January 2025, the longest unbroken run of contraction since the global financial crisis.
S&P Global UK Construction PMI Total Activity
Index, sa, >50 = growth m/m
Data were collected 9–30 July 2026.
Source: S&P Global PMI
All three main sub-sectors recorded slower rates of decline in July. Commercial work was the most resilient, with an index reading of 46.8, while house building contracted at its mildest pace since October 2025 (41.8). Civil engineering remained the weakest performer, posting the steepest rate of decline at 38.3.
New orders fell at the slowest rate in 10 months, with some firms reporting a revival in tender activity across commercial development, residential projects and transport infrastructure. However, many respondents cited continued headwinds from geopolitical uncertainty and weak domestic demand.
Employment fell for the seventh consecutive month, though the rate of job losses eased to its slowest since February. Firms attributed workforce reductions primarily to the non-replacement of voluntary leavers. Subcontractor availability improved to its greatest extent since April 2025.
Input cost inflation eased to a five-month low, though companies continued to report higher costs linked to fuel surcharges and rising raw material prices, which they attributed in part to the conflict in the Middle East. Supply chain conditions also improved, with fewer reported transportation delays.
Business confidence for the year ahead was the most positive since February. Approximately 38% of survey respondents expected an expansion in activity over the next 12 months, compared with 17% anticipating a decline.
"July data suggests that the performance of UK construction sector has started to stabilise after a sharp downturn throughout the second quarter of 2026," said Tim Moore (pictured right), economics director at S&P Global Market Intelligence. "Business activity levels continued to decline in all three main categories, but in each case the rate of contraction was much slower than in June. This was supported by the weakest reduction in new business intakes since September 2025."
Moore added that survey respondents had noted signs of a turnaround in client demand and a revival in tender opportunities in some cases, despite subdued underlying market conditions. He said this had contributed to more upbeat business activity expectations for the year ahead, with confidence at its highest since February.
"A renewed improvement in supplier performance and softer input cost inflation were also positive developments in July," Moore said. "Construction companies widely commented on fuel surcharges and higher raw material prices due to the war in the Middle East, but the overall rate of cost inflation was the lowest for five months."
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