UK construction output fell in September at its slowest rate for eight months, according to the latest S&P Global UK Construction PMI.
The headline seasonally adjusted S&P Global UK Construction Purchasing Managers' Index rose to 46.1 in September from 44.3 in August. It remains below the 50.0 mark that separates growth from contraction, however, new orders weakened, job cuts sped up and business confidence dropped sharply.
All three parts of the sector shrank more slowly than in August. Commercial construction held up best at 48.5, its smallest fall since May 2025. House building was again the weakest at 40.7. Civil engineering also fell more slowly.
The wider picture was less encouraging. New orders fell at the fastest rate for three months. Firms said clients were taking longer to commit and putting off decisions on major projects. They pointed to weak demand, geopolitical tensions and sharply rising input costs.
Employment fell at the fastest rate for five months, and the use of subcontractors also dropped again. Firms cut their buying of materials and products sharply, which merchants and suppliers will notice.
Demand for construction products and materials fell at a marked pace in September, which continued the downturn that began in December 2024. However, suppliers' delivery times lengthened for the second month running and to the greatest extent since May.
Survey respondents attributed worsening vendor performance to international shipping delays and ongoing supply chain disruption related to the Middle East conflict. Business optimism dropped to its lowest level since May with 31% of firms expecting activity to rise over the next year and 21% expecting it to fall.
Tim Moore, Economics Director at S&P Global Market Intelligence, said: "The downturn in UK construction output was the least marked since January. All three sub-sectors have seen a degree of stabilisation relative to the rapid declines reported in the second quarter of 2026. In September, commercial building work saw its smallest fall in activity since May 2025. House building was again the weakest performer as rising borrowing costs and unfavourable market conditions weighed on output.
"Latest data indicated that overall input price inflation softened for the fourth month in a row, but this trend seems unlikely to endure given recently escalating fuel prices and transportation costs.
"Softer order books, elevated inflationary pressures and concerns about rising borrowing costs were all reasons for construction companies to moderate their year ahead growth expectations during September. This led to a sharp drop in business optimism to its lowest since May."
