Sector records sharpest drop in activity over the last five months
The UK construction sector contracted at a faster pace in April, as weaker demand, fewer project starts and higher input costs weighed on activity.
The seasonally adjusted S&P Global UK Construction PMI Total Activity Index fell to 39.7 in April, down from 45.6 in March. A reading below 50 indicates a decline in activity compared with the previous month.
Source: S&P Global PMI
The latest figure marked the sharpest fall in construction output since November 2025. Activity has now declined every month since January 2025.
Civil engineering recorded the steepest fall, with an index reading of 35.3. Housebuilding also remained under pressure at 38.2, while commercial construction posted a reading of 42.7. Although commercial work was less weak than other areas, it still recorded its fastest fall so far this year.
New business fell at the fastest rate since November 2025. Construction firms cited weak demand and a shortage of new work to replace completed projects. Some respondents said uncertainty linked to the Middle East conflict had lengthened sales cycles and reduced tender opportunities.
Employment also declined. Firms reported that lower workloads, fewer project launches and wage pressures had led some companies not to replace staff who left voluntarily.
Purchasing activity also fell sharply in April, reflecting reduced output across the sector. However, some companies said they had brought forward purchases of raw materials because of concerns over future price increases and supply disruption.
Supplier delivery times lengthened for the second consecutive month. The deterioration was the most marked since December 2022, with respondents pointing to international shipping delays and problems importing materials from the GCC region.
Input cost inflation also accelerated. Around 69% of surveyed firms reported higher input costs in April, up from 48% in March. Only 2% reported a fall. S&P Global said this indicated the fastest rise in input prices since June 2022.
Fuel surcharges were a key factor behind the increase, with firms also reporting higher raw material and transportation costs. Subcontractor charges rose at the fastest pace for three years.
“A rapid acceleration of input cost inflation was seen across the UK construction sector in April,” said Tim Moore (pictured right), economics director at S&P Global Market Intelligence. “Aside from the post-pandemic surge in input prices from early-2021 to mid-2022, the latest rise in purchasing costs was the steepest in three decades of data collection.
“Around two-thirds of the survey panel reported higher cost burdens in April, which was overwhelmingly linked to fuel surcharges and subsequent rises in raw material prices. Adding to supply chain challenges, the latest data also indicated longer wait times for the delivery of construction items due to international shipping delays.
“Expectations for construction activity over the next 12 months remained positive overall during April, but confidence levels were the lowest since last November. Survey respondents cited a growing list of factors weighing on construction sector optimism, including fragile investment sentiment and elevated borrowing costs, alongside continued uncertainty about the impact of the Middle East conflict on prices, supply chains and broader economic prospects.”
“The construction industry has been dealt a difficult hand so far,” added Terry Woodley (pictured right), managing director of development finance at specialist lender Shawbrook. “Planning system delays and limited policy support to incentivise housebuilding have meant that activity has continued to decline.
“On top of this, ongoing geopolitical uncertainty has meant additional challenges, including an increase in inflation, a rise in fuel and energy prices and disruptions to transport and shipping - further dampening activity.
“As such, short-term predictions for the sector are muted. Developers are right to exercise caution in these circumstances and should consult a broker to ensure they can access the right funding options needed to get projects over the line this year.”
Want to be regularly updated with mortgage news and features? Get exclusive interviews, breaking news, and industry events in your inbox – subscribe to our FREE daily newsletter. You can also follow us on Facebook, X (formerly Twitter), and LinkedIn.
