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UK Construction Activity Records Steepest Decline Since 2020 | PMI Falls to 38.2

  • by- Zaid
  • Jun 8, 2026
Britain's construction sector contracted at its fastest pace in six years during May. Economic uncertainty, inflationary pressures, and disruptions linked to the Iran conflict weighed heavily on project activity.
UK Construction Activity Records Steepest Decline Since 2020 | PMI Falls to 38.2

June 8: Britain's construction sector experienced its sharpest slowdown in six years during May, according to the latest survey from S&P Global.

The monthly Purchasing Managers' Index (PMI) for UK construction fell to 38.2 in May from 39.7 in April. This marked its lowest level since May 2020, when the COVID-19 pandemic disrupted construction activity across the country.

The index remained well below the 50-point threshold that separates expansion from contraction. The latest figure was also substantially lower than economists' median forecast of 40.2.


Residential Building Worst Hit

Construction companies reported a combination of site delays, fewer tender opportunities, and weaker client demand.

Residential housebuilding recorded the steepest decline among all segments. Commercial projects such as offices and retail developments proved comparatively more resilient.

Survey participants attributed these challenges to:

  • The ongoing conflict in the Middle East (Iran conflict)

  • Continued political uncertainty in the UK

  • Rising fuel, energy, and transport costs

Cost Pressures and Supply Chain Issues

The survey highlighted a sharp increase in cost pressures. Construction firms reported the fastest rise in input costs since mid-2022, when global markets were impacted by Russia's invasion of Ukraine.

Supply chain challenges intensified during the month, with companies reporting the most widespread shipping delays since late 2022. Industry participants linked part of the disruption to the closure of the Strait of Hormuz, a key global trade route.

Tim Moore, Economics Director at S&P Global Market Intelligence, stated that fuel surcharges and rapid increases in prices of energy-intensive raw materials continued to affect construction supply chains.


Employment and Business Confidence

Employment levels in the sector continued to decline, extending a trend that has now lasted for 17 consecutive months. Although companies reduced jobs at a slower pace than in April, workforce numbers continued to come under pressure.

Business confidence remained subdued, with optimism regarding the next 12 months reaching its second-lowest level since the end of 2022. Many firms expressed concern about the sustainability of future workloads.


Broader UK Economy Impact

The weakness in construction activity reflected broader challenges across the UK economy.

The all-sector PMI, which combines data from services and manufacturing alongside construction, fell to 48.7 during May from 51.5 previously. This indicates an overall contraction in business activity. The reading was the lowest since the period following the announcement of broad US tariff measures in 2025.


The Bottom Line

The UK construction sector is facing multiple headwinds – rising input costs, supply chain disruptions, weakening demand, and falling business confidence. With the PMI at a six-year low and residential building in sharp decline, the near-term outlook remains challenging.