Builders Merchants Journal – BMJ Publishing to Builders Merchants and the UK merchanting industry for more than 95 years
There was a further steep decline in UK construction output in May, according to the S&P Global UK Construction Purchasing Managers’ Index™ (PMI®), released today (June 4) which fell at the fastest pace for six years.
At the same time, higher energy, fuel and transportation costs led to the fastest pace of price rises since June 2022. At 38.2 in May, down from 39.7 in April, the headline was below the neutral 50.0 threshold for the 17th month running. More worryingly, the rate of contraction was the steepest since May 2020. Aside from the drop in construction output at the start of the pandemic, the latest fall was the fastest since March 2009.
All three broad categories of construction work posted sharp declines in output levels during May. Residential activity, at 36.0, performed the worst, with commercial construction, at 39.0 reflecting risk aversion among clients in response to inflationary trends and geopolitical uncertainty. Civil engineering work – 36.2 – saw fell was marginally better than April.
Despite the weaker demand for construction products and materials, the latest survey indicated that suppliers’ delivery times lengthened for the third month running in May. Almost two-thirds of the survey panel signalled a rise in input prices during May, while only 1% experienced a decline.
Business activity expectations for the next 12 months remained positive in May, but the degree of optimism eased to the second-lowest since December 2022. Around 31% of the survey panel predict a rise in output levels during the year ahead, while 25% forecast a reduction
Tim Moore, Economics Director at S&P Global Market Intelligence, said: “House building remained especially subdued, and there were fresh challenges in the construction sector from a considerable softening of commercial activity since April. Anecdotal evidence suggests that economic uncertainty and rising inflation in the wake of the Middle East conflict triggered the steepest drop in new work since the beginning of the pandemic.
“Concerns about a prolonged decline in construction order books, alongside unfavourable near-term UK economic prospects, weighed on business optimism in May. This index has fallen sharply since the start of 2026, and confidence levels are now almost as low as those seen ahead of last autumn’s Budget.”
