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Construction activity in the UK fell for a 22nd consecutive month in October, with the downturn deepening to its sharpest since June, according to the latest purchasing managers' index. The headline S&P Global Construction PMI fell to 43.6 in October from 46.1 in September, well below the 50 mark that separates growth from contraction. A reading below 50 means activity is falling, and the October figure shows that the decline is getting worse rather than better.
Housebuilding was the weakest part of the sector, with the residential index falling to 35.1, its lowest since December 2025 and the steepest fall in housebuilding activity of 2026 so far. Civil engineering fell to 45.9, although that was the slowest contraction since May 2025, while commercial building eased to 46.3 from a 16-month high in September. The figures show that all three parts of construction are shrinking, with housing hit hardest by weak demand and by higher costs.
Input costs rose sharply, with 48 percent of firms reporting higher costs in October, up from 25 percent in September, as prices for materials and labour continued to climb. The rise in costs is squeezing margins for builders, who are finding it harder to pass on the increases to customers. Only 34 percent of firms expect output to rise in the next 12 months, compared with 27 percent who expect it to fall, the weakest net sentiment since May, showing that confidence in the sector is low.
The survey, which covers around 150 construction firms and was carried out between 12 and 29 October, shows a sector under pressure from weak demand, higher costs and uncertainty about the future. Housebuilders have cut back on new sites, while commercial developers have delayed projects as they wait for conditions to improve. The government has set ambitious targets for housebuilding, but the latest figures suggest the industry is moving in the opposite direction.
For the wider economy, the construction downturn is a concern because the sector employs hundreds of thousands of people and supports many other businesses, from materials suppliers to architects and engineers. A prolonged slump in construction can drag on growth and on jobs, and it can also make it harder to build the homes and infrastructure the country needs. The industry will be hoping for a recovery in 2027, but the October data suggests it is not yet in sight.
Source: Construction News
