UK construction firms reported a two-point increase in overall business confidence to 46% in June, according to the latest Business Barometer from Lloyds.
More than half of the 190 construction firms surveyed (60%) said that stronger customer or market demand was their main reason for optimism in the economy.
More than two thirds (67%) of respondents expect their business activity to increase in the next year, up four points from 63% in May, while fewer than one in 10 (8%) expect weaker activity, down one point from 9% in May.
Construction was the only sector of the 1,200 businesses surveyed that saw an increase in confidence in their own trading outlook, which increased five points to 59%.
Businesses in the sector see entering new markets, making new hires or offering new products of services (42% each) as the biggest opportunities to grow their business in the next six months.
The overall business confidence reading for construction firms for June (46%) tracks slightly below the longer-term trend. Since June 2025, the sector's 12-month average reading for overall business confidence is 47%.
Max Jones, Director and Head of Construction at Lloyds, said: "Construction firms have spent the last few years adapting to a multitude of complexities. These latest figures suggest that optimism is edging up, giving businesses across the sector a more positive outlook for the months ahead.
"Many firms are now preparing for growth with confidence. Backed by strong demand and long-term investment in infrastructure, opportunities are emerging across the sector, creating momentum as businesses look towards the second half of the year."
Overall business confidence fell in June by three points to 44%, below the 12-month average of 47%.
Domestic firms reported lower confidence in both their trading outlook and economic optimism, citing cost pressures (up 2 points) and global uncertainty (up 7 points) as factors affecting confidence in the wider economy. Firms that trade internationally were more confident in both their economic optimism and trading outlook.
Optimism in the wider economy fell four points to 31% in June, below the 12-month average of 38%. In June, 55% said they were optimistic (no change from May), while those who felt more pessimistic increased by four points to 24%. The main factors cited by firms remained consistent with previous months, with rising inflation and cost pressures up three points, and continuing global uncertainty up four points.
Businesses' own trading outlook decreased by two points in June to 56%, compared to a 12-month average of 57%. Sixty-four percent of firms (down two points vs May) expect stronger output over the year ahead, while the share expecting weaker activity remained unchanged at 8%. Among firms expecting weaker activity, the main factors remained consistent with May and April: economic uncertainty, and continuing cost pressures
Business confidence was highest in the East Midlands and London, both posting monthly increases of two points and eight points respectively. Despite a 15-point decline, the North East ranked third at 54%, maintaining its position among the more confident regions. Sentiment fell most in the East of England and the West Midlands, pointing to renewed softness in parts of the country.
