UK construction companies recorded further sharp declines in output and new orders during June. However, both rates of contraction eased from May’s six-year records.
Cost pressures moderated in June, and supply chain disruptions were notably less acute than in April and May. The seasonally adjusted S&P Global UK Construction Purchasing Managers’ Index (PMI) – an index tracking changes in total industry activity – registered 38.4 in June, up slightly from May’s six-year low of 38.2 but still well below the neutral 50.0 value.
Construction output has decreased in each month since January 2025 and the latest fall was the second-fastest since the start of the pandemic.
House building activity (index at 35.9) decreased at the sharpest pace in 2026 to date.
Lower levels of construction activity were attributed to a mixture of subdued housing market conditions, higher borrowing costs, elevated business uncertainty, and delayed project starts.
June data signalled another sharp fall in total new work, although the speed of the downturn was the slowest since March.
Anecdotal evidence cited factors such as fewer newbuild house sales, weak business investment spending, and intense competition for new orders.
Twice as many construction companies (38%) expect an increase in business activity over the year ahead as those that predict a decline (19%). This pointed to a marked rebound in business optimism from the six-month low seen in May.