S&P: UK Construction PMI Falls to 44.3 in August, Contracting for 20 Consecutive Months

en.Wedoany.com Reported - On September 4, the UK Construction Purchasing Managers' Index (PMI) released by S&P Global showed that the seasonally adjusted index stood at 44.3 in August, down from 44.7 in July, marking the 20th consecutive month below the 50.0 threshold. Residential building activity saw an accelerated decline, while the pace of contraction in commercial construction and civil engineering slowed.

The residential building sub-index fell to 37.6 in August from 41.8 in July, making it the only category among the three major segments to record a faster contraction. Surveyed companies reported weak client demand, fewer new projects, and particularly insufficient housing starts. The commercial construction index stood at 47.8, with the pace of decline narrowing to the smallest since January; the civil engineering index was 40.5, with the decline easing to the smallest since March, as some firms reported improvements in infrastructure activity.

Construction companies continued to see a decline in new orders, though the pace of contraction slowed to the smallest since September 2025. Tim Moore, Economics Director at S&P Global Market Intelligence, noted that transport infrastructure, data centre, and energy projects provided some business support; however, client delays in decision-making and risk-aversion sentiment stemming from the Middle East conflict continued to constrain project demand.

With new business insufficient to replace completed projects, coupled with cost pressures, construction firms continued to reduce headcount. Nevertheless, the rate of job shedding slowed to the lowest since February, while subcontractor usage recorded its first increase in nearly two years, and the rise in subcontractor charges eased to the lowest since March.

The decline in purchasing activity widened in August compared with July, while supplier delivery times remained broadly stable overall, with some surveyed firms reporting longer international shipping durations. Fuel, transport, and raw material costs continued to rise, but the overall increase in input costs slowed to a six-month low, with some suppliers showing stronger price competition.

Over the next 12 months, approximately 38% of surveyed firms expect construction activity to increase, while 20% anticipate a decline. Overall sentiment retreated from July, with surveyed firms citing weak client confidence, an uncertain domestic economic outlook, and geopolitical conflicts as key constraints, while some companies looked forward to a rebound in tender opportunities in areas such as commercial construction. The survey data was collected between August 12 and 27.