The downturn in the UK construction sector slowed at the start of the year, survey data from S&P Global revealed Thursday.
The construction Purchasing Managers’ Index registered 46.4 in January, up from December’s five-and-a-half year low of 40.1. The score was well above economists’ forecast of 42.2.
The latest reading was the highest since June 2025. However, the score remained below the 50.0 no-change value for the thirteenth month in a row.
“January data provided encouraging signs that the UK construction sector has exited its tailspin, and firms are becoming more hopeful that new projects will get back on track in 2026,” S&P Global Market Intelligence Economics Director Tim Moore said.
Due to the lack of new projects and subdued demand, house building was the weakest-performing segment in January. Civil engineering activity also decreased at a sharp pace in January. Meanwhile, commercial work fell at the slowest pace since May 2025.
The survey showed that total new work decreased to the least marked extent for three months in January.
Business activity expectations for the year ahead continued to rebound from the 35-month low seen in November. Sentiment reached its highest level since May 2025.
Meanwhile, a robust and accelerated increase in average cost burdens presented a challenge for construction companies in January. Input price inflation reached the fastest since last September. Subcontractor charges also increased at a solid pace.
Data signaled a solid reduction in staffing numbers, extending the current period of job losses to 13 months.
Finally, purchasing activity decreased sharply in January. Cutbacks to input buying mostly reflected a lack of new work to replace completed projects.
Softer demand and improved materials availability in turn contributed to a sustained improvement in supplier performance, the survey showed.
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