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The UK construction sector has experienced a prolonged downturn, with February marking the 14th straight month of contraction, the longest since the global financial crisis. The S&P Global PMI fell to 44.5, below expectations, mainly due to weak residential building, rising costs, and disrupted projects from adverse weather. Despite a rise in business optimism and a steady broader services PMI, the sector faces persistent challenges that contrast with government targets for housing and highlight risks for overall economic growth.
Activity in the UK construction sector contracted for the 14th consecutive month in February, marking its longest period of decline since the global financial crisis, despite a modest improvement in business sentiment. The S&P Global UK Construction Purchasing Managers Index (PMI) dropped to 44.5, down from January's seven-month peak of 46.4, remaining well below the 50-point threshold that separates growth from contraction. Economists had expected a reading closer to 47.0, highlighting the sector's continued challenges. Advertisement
Rising optimism among construction firms offered a rare positive signal, reaching its highest level in 14 months. However, the overall downturn in February was sharper than the average decline seen since sub-50 readings began in early 2025. Analysts noted that a slowdown in residential building was the main factor behind the weaker performance, following tentative signs of stabilization earlier this year.
S&P Global highlighted falling order books as a result of sluggish market demand, unusually wet weather that disrupted projects, and the steepest rise in cost pressures since July 2025. Residential building activity fell for the eighth straight month, with the subindex declining to 37.0 from January's 39.3. Both commercial construction and civil engineering also recorded contractions.
The ongoing slowdown contrasts with Prime Minister Keir Starmer's government target of building 1.5 million homes over its five-year term, a pace not seen in the UK since the 1970s. The construction sector contributed over 6% of Britain's economic output in 2025, underlining the significance of its decline. Meanwhile, the broader services PMI remained positive, with the all-sector reading including manufacturing standing at 52.9, slightly lower than January's 53.1, which had been the highest since August 2024.
Source Reuters
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