The S&P Global UK Construction Purchasing Managers’ Index (PMI) recorded a drop in business activity and rising cost inflation in April, as the sector faced another challenging month.
The index that tracks changes in total industry activity registered 39.7 in April, down from 45.6 in March, which the report says indicates a sharp fall in overall business activity. Reduced output has been seen in each month since January 2025 and the latest reading was the weakest for five months.
Civil engineering activity (index at 35.3) registered the steepest decline, followed by housebuilding (38.2). Commercial work (42.7) showed some resilience in comparison to elsewhere in the construction sector, although the latest reduction was the fastest recorded so far in 2026.
Survey respondents widely reported subdued demand conditions and a subsequent lack of new work to replace completed projects in April. This was signalled by the sharpest decline in total new business since November 2025. Construction firms noted that the Middle East conflict had led to longer sales conversion times and few tender opportunities, creating a feeling of elevated business uncertainty.
The report also highlighted that softer order books had contributed to a sustained downturn in staffing levels during the month, while the pace of job shedding was the steepest for four months. A number of firms noted that fewer project starts and strong wage pressures had led to the non-replacement of voluntary leavers.
The latest survey pointed to a sharp and accelerated decline in overall purchasing activity across the construction sector, largely reflecting reduced workloads. However, some firms commented on advanced purchasing of raw materials due to concerns about escalating costs and potential supply disruptions.
Tim Moore, economics director at S&P Global Market Intelligence, said: “A rapid acceleration of input cost inflation was seen across the UK construction sector in April. 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.”
Terry Woodley, MD of development finance at Shawbrook, commented: “The construction industry has been dealt a difficult hand so far. 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.”
