Tough market conditions  and pre-Budget jitters hit construction output hard in November, according to the latest PMI report.

All three construction sub-sectors saw the greatest fall in activity since the peak of the Covid pandemic in May 2020 with output reporting its steepest downturn for five-and-a-half years.

At 39.4 in November, down from 44.1 in October, the headline S&P Global UK Construction Purchasing Managers’ Index (PMI) – a seasonally adjusted index tracking changes in total industry activity – was the lowest since May 2020. Lower volumes of construction output have now been recorded for 11 months in a row.

Sub-sector data showed that housing activity (index at 35.4), commercial construction (43.8) and civil engineering (30.0) all experienced the fastest downturns in activity for five-and-a-half years. Figures in all three sectors were well below the ‘no change’ figure of 50.

Survey respondents commented on fragile market confidence, delays with the release of new projects and a general lack of incoming new work

Total new business decreased at a rapid pace in November. Around 44% of the survey panel reported a fall in new orders, while only 17% signalled an increase.

Aside from the pandemic, the resulting seasonally adjusted New Orders Index pointed to the fastest downturn in new work since early-2009. Construction companies commented on sales headwinds due to risk aversion among clients, worries about the UK economic outlook and elevated business uncertainty ahead of the Budget.

Employment numbers across the construction sector decreased for the eleventh consecutive month in November, reflecting a lack of new work to replace completed projects and elevated wage pressures.

The latest fall in staffing levels was the steepest since August 2020. Subcontractor usage also decreased, as has been the case in each month since December 2024.

Looking ahead, the proportion of construction companies expecting an upturn in business activity in the next 12 months (31%) narrowly exceeded those forecasting a decline (25%).

The resulting Future Activity Index signalled the lowest degree of optimism since December 2022. Some firms commented on hopes of a rebound in general market conditions and support from lower borrowing costs. However, this was offset by signs of cutbacks to clients' investment spending plans and concerns about long-term domestic economic prospects.

Tim Moore, economics director at S&P Global Market Intelligence, said: "November data revealed a sharp retrenchment across the UK construction sector as weak client confidence and a shortfall of new project starts again weighed on activity.”

Brian Smith, head of cost management at AECOM, added: “This represents another month with a reduction in activity, continuing the trend that started at the beginning of 2025. Firms could be forgiven for not displaying any festive cheer, but the government has made all the right noises by protecting capital spending and backing planning reform. However, clients need to see further progress before committing to new projects.

“The additional 350 planners announced in the chancellor’s Budget is a good example of the tangible measures that will fuel a growth in activity. But this needs to be combined with a shift in mindset, including embracing AI and digital tools to speed up how planning submissions are reviewed. Seeing this sort of progress in action will boost confidence among the country’s contractors in 2026.”