UK Construction PMI Falls to 43.6 as Housing Hits 2025 Low

UK construction activity fell to 43.6 in October, down from 46.1 in September, according to the S&P Global UK Construction Purchasing Managers' Index. The reading marks the twenty-second consecutive month below the neutral 50.0 threshold (readings under 50 signal contraction).

Residential work was the weakest segment by a wide margin. Its index reading of 35.1 was the lowest since December 2025 and the steepest reduction in house building activity so far this year, according to S&P Global.

Civil engineering posted 45.9, still contracting but at the slowest pace since May 2025. Commercial activity registered 46.3, easing from September's 16-month high but showing some resilience.

What does the slowdown mean for contractors?

Total new work fell at the sharpest pace since June. Buyers cited subdued market conditions and fragile customer demand. The bright spot was infrastructure: some firms reported improved order books driven by data centres, energy networks and utilities projects.

Tim Moore, Economics Director at S&P Global Market Intelligence, said: "October data indicated a setback for the UK construction sector after some signs of stabilisation in the previous month. Business activity decreased at the fastest pace since June amid the steepest reduction in residential work so far this year."

Input costs accelerate sharply

Purchasing price inflation rose at the steepest rate since June, well above the long-run survey average and accelerating sharply from September's seven-month low.

Moore said: "Construction companies commented on severe headwinds in the house building sector from rising borrowing costs, weak consumer confidence and elevated economic uncertainty. However, there were reports of strong demand for data centre projects, alongside rising workloads in the energy and utilities sectors."

Cost pressures came from multiple directions:

• Fuel surcharges reported by many firms
• Increased energy costs
• Higher raw material prices, especially aggregates, concrete, electrical items and steel
• Continued delivery delays for construction products and materials

The cost pressure was broad-based. Almost half of the survey panel — 48% — reported an increase in input costs in October, up from 25% in September.

Business optimism slides

Faced with rising input price inflation, higher borrowing costs and reduced order books, firms turned cautious on the year ahead. The degree of optimism towards activity growth eased again in October and now sits at one of the lowest levels since the end of 2022.

Moore said: "Faced with rising input price inflation, higher borrowing costs and reduced order books, construction firms were unsurprisingly cautious about the year ahead business outlook."

With house building contracting at its fastest pace this year and input costs climbing, the sector enters the closing months of 2025 with demand concentrated in data centres, energy and utilities — the few segments still generating new work.