June marked another month of sharp contraction in the UK construction sector, though the downturn showed slight signs of easing compared to May’s six-year low. The S&P Global UK Construction Purchasing Managers’ Index (PMI) rose marginally to 38.4 in June from 38.2 in May, with the 50-mark indicating the division between growth and contraction.
Construction sector: Commercial Building Shows Some Resilience
While the overall sector faced challenges, the commercial activity index improved slightly, although it remained one of the weakest readings since the onset of the pandemic. Tim Moore, economics director at S&P Global Market Intelligence, noted that some survey respondents expressed optimism, citing recent new contract awards and an anticipated improvement in broader market conditions.
House Building and Civil Engineering Hit Hard
In stark contrast to the slight improvement in commercial activity, house building experienced its sharpest decline of 2026 so far. Civil engineering also suffered, plummeting to its steepest fall since April 2020. This downturn was attributed to delayed infrastructure projects and a reduction in public sector tenders.
Demand and Employment Trends
The new orders index climbed to a three-month high, signalling a slower but still sharp decline in demand within the construction sector. Employment figures continued to decline, marking the 18th consecutive month of job losses. However, there was a silver lining as subcontractor availability improved at the fastest pace since April 2025.
Cost Pressures Begin to Ease
In a positive development, cost pressures seemed to ease, with the input prices index falling from May’s near four-year high. This alleviation may provide some relief to businesses struggling to maintain profitability amid ongoing challenges.
