Fastest rate of decline in UK construction activity for five years

The S&P Global UK Construction Purchasing Managers’ Index (PMI) registered a score of 44.1 for the month, down from 46.2 in September, where anything less than 50.0 indicates a contraction in activity.

It was the tenth consecutive month that UK construction buyers reported a decline, making it the longest period of continuous decline since the global financial crash in 2008.

Civil engineering was the weakest-performing sector, scoring 35.4. Activity fell at the sharpest pace since May 2020. Survey respondents cited a lack of new work to replace completed projects.

Residential activity also fell to 43.6, while commercial activity was little-changed from September at 46.3.

There was also a “sustained downturn” in new work and the rate of decline accelerated since September, although remained slower than seen on average in the first half of 2025.

Buyers reported fewer tender opportunities and delays to the release of new projects.

Tim Moore, economics director at S&P Global Market Intelligence, said, “UK construction companies reported another challenging month in October, as the prolonged weakening of order books so far in 2025 resulted in the fastest decline in business activity for over five years.

UK Construction PMI, October 2025

“Reduced workloads were again widely attributed to risk aversion and delayed decision-making among clients, which contributed to a slower-than-expected release of new projects. Subdued demand in the wake of heightened political and economic uncertainty also led to the steepest drop in input buying since May 2020.”

UK Chancellor Rachel Reeves is due to present her Budget later this month and has repeatedly refused to rule out tax increases, although it remains to be seen what form those tax increases could take. Meanwhile, the Bank of England is expected to cut interest rates further from their current level of 4%. There is a one in three chance that they could be cut as early as today (6 November), according to the money markets.

Moore added, “Meanwhile, some positive signals for the construction sector in October included a slowdown in cost inflation to its lowest for one year, rising subcontractor availability, and a sustained improvement in supplier performance.

“Looking ahead, business activity expectations for the coming 12 months remained much weaker than the long-run survey average, largely due to worries about fragile investment sentiment and weak sales pipelines. However, overall optimism levels edged up to the highest since July as the prospect of lower borrowing costs reportedly helped to boost demand projections.”