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The downturn in the UK construction sector showed signs of easing in May, according to the latest S&P Global UK Construction Purchasing Managers’ Index™ (PMI®).
Output and new orders both fell at the slowest pace since January, while growth projections for the year ahead improved again. Employment remained weak, with job shedding accelerating to its fastest since August 2020. The headline Index posted 47.9 in May, up from 46.6 in April, to signal the slowest reduction in output volumes since January.
House building was the weakest-performing segment in May (index at 45.1), and, in residential construction work, the downturn accelerated since April amid ongoing reports of subdued demand conditions.
Civil engineering also decreased at a solid pace in May (45.9), which extended the current period of contraction to five months. Meanwhile, commercial work (49.5) fell only marginally and the rate of decline was the slowest since the downturn began in January.
Total new work received by UK construction companies decreased to the least marked extent for four months in May, although employment numbers fell at the fastest pace for nearly five years. Purchasing activity reduced in response to lower workloads, which resulted in fewer pressures on supplier capacity and a subsequent improvement in delivery times during May, although prices continued to rise.
Business activity expectations for the year ahead edged up to the highest since December 2024. Around 39% of the survey panel forecast a rise in output levels, while 16% predict a decline. Positive projections were attributed to hopes of a turnaround in housing market conditions, greater infrastructure work, and the impact of lower borrowing costs on client demand. This was balanced against concerns about the general UK economic outlook and the negative impact of rising business uncertainty on sales pipelines.
Tim Moore, Economics Director at S&P Global Market Intelligence, said: “The construction sector continued to adjust to weaker
order books in May, which led to sustained reductions in output, staff hiring and purchasing. However, the worst phase of spending cutbacks may have passed as total new work fell at a much slower pace than the near five-year record in February.”
