The UK’s construction sector continues to battle challenging conditions, with output declining at the fastest rate since November 2025 – according to the latest PMI report.

Business activity decline in April as costs intensified with input cost inflation the strongest since June 2022.

The headline seasonally adjusted S&P Global UK Construction Purchasing Managers’ Index  (PM®) – an index tracking changes in total industry activity – registered 39.7 in April, down from 45.6 in March and indicative of a sharp fall in overall business activity. The figure was also well below the ‘no change’ figure of 50.

Reduced output has been seen in each month since January 2025 and the latest reading was the weakest for five months.

Civil engineering activity (index at 35.3) registered the steepest decline, followed by house building (38.2).

Commercial work (42.7) showed some resilience in comparison to elsewhere in the construction sector, although the latest reduction was the fastest recorded so far in 2026.

Survey respondents widely reported subdued demand conditions and a subsequent lack of new work to replace completed projects in April. This was signalled by the sharpest decline in total new business since November 2025.

Construction companies often noted that elevated business uncertainty due to the Middle East conflict had led to longer sales conversion times and fewer tender opportunities.

Softer order books contributed to a sustained downturn in staffing levels during April and the pace of job shedding was the steepest for four months.

A number of firms noted that fewer project starts and strong wage pressures had led to the non-replacement of voluntary leavers.

The latest survey pointed to a sharp and accelerated decline in overall purchasing activity across the construction sector, largely reflecting reduced workloads.

Business activity expectations softened in April and were the least optimistic since November 2025. Some firms noted confidence linked to long-term infrastructure projects and hopes of a rebound in demand if the Middle East conflict subsides. However, construction companies also widely commented on expected growth headwinds during the year ahead from rising inflation and elevated borrowing costs, as well as fragile investment sentiment.

Tim Moore, economics director at S&P Global Market Intelligence, said: “A rapid acceleration of input cost inflation was seen across the UK construction sector in April. Aside from the post-pandemic surge in input prices from early-2021 to mid-2022, the latest rise in purchasing costs was the steepest in three decades of data collection.

“Around two-thirds of the survey panel reported higher cost burdens in April, which was overwhelmingly linked to fuel surcharges and subsequent rises in raw material prices. Adding to supply chain challenges, the latest data also indicated longer wait times for the delivery of construction items due to international shipping delays.”

Brian Smith, head of cost management at AECOM, said: “A dip in output is a troubling sign for a period when activity typically starts to pick up. While a hold in interest rates will keep pressure on developers and buyers, greater stability in borrowing costs should provide a more predictable backdrop for investment decisions.

“Geopolitical tensions continue to threaten rising inflation, further sustaining an unwanted period of uncertainty for developer and contractor confidence.

“Closer to home, firms will be hoping the upcoming results of this week’s devolved and local elections across England, Scotland and Wales will not cause any major planning or approval delays, which could threaten further decline.

“The contractors that sustain healthy pipelines and protect margins will be those taking a disciplined approach to project selection while embedding AI and digital tools to drive efficiency.”