UK construction activity falls for first time since in 10 months

That’s according to the latest S&P Global UK Construction purchasing managers’ index (PMI).

The index recorded a score of 48.1 in January (where any score lower than 50.0 indicates a contraction), down from 53.3 in December.

Meanwhile, cost inflation in UK construction has accelerated to a 21-month high, according to the buyers surveyed.

Construction companies said that delayed decision-making by clients on major projects and general economic uncertainty has weighed on business activity at the start of the year.

The housebuilding sector remains subdued, with activity in the sub-sector scoring 44.6 in January, marking a fourth successive month of decline.

Civil engineering also declined to 44.6 although construction companies suggested that this could have been, at least in part, because of unusually wet weather at the start of the year.

Commercial construction also returned to a decline (48.9), which was linked to a lack of tender opportunities and a reluctance among clients to commit to new projects.

There was also a modest decline in the number of new orders recorded in January 2025. S&P Global said that anecdotal evidence pointed to a lack of confidence among clients and worries about the UK economic outlook.

Tim Moore, economics director at S&P Global Market Intelligence, said, “UK construction output fell for the first time in nearly a year as gloomy economic prospects, elevated borrowing costs and weak client confidence resulted in subdued workloads.

“Output levels decreased across the board in January, with particularly sharp reductions seen in the residential and civil engineering categories.”