Financial News: UK Construction Sector Continues To Shrink

UK Construction Sector Continues To Shrink

05/07/2025 - 06:45:00 (RTTNews)

(RTTNews) - The UK construction activity continued to contract in April as business uncertainty and concerns about economic outlook damped client demand, survey data from S&P Global showed on Wednesday.

The construction Purchasing Managers' Index rose unexpectedly to 46.6 in April from 46.4 in March. Output declined at the slowest pace in three months.

The score was expected to fall to 46.0. However, a reading below 50 indicated contraction.

Residential work showed a degree of resilience in April, with the rate of contraction easing to the least marked in 2025 to date.

Meanwhile, civil engineering remained the weakest-performing area in April. At the same time, commercial work dropped for the fourth consecutive month and the pace of decline accelerated to its fastest since May 2020.

Data showed a steep reduction in total new work and the pace of decline was the second-fastest since May 2020. Lower workloads resulted in the fastest fall in purchasing activity for nearly five years.

There was a sharp increase in average cost burdens. Companies noted that a wide range of items showed price growth. Many firms reported that suppliers had sought to pass on rising payroll costs.

Staffing numbers decreased for the fourth straight month but the rate of job shedding eased slightly since March. Subdued demand and rising pay pressures were cited as reasons for the non-replacement of voluntary leavers.

Firms were optimistic regarding their prospects for the next twelve months in April. Business optimism hit its highest level since December 2024.

"UK construction companies have endured a bumpy ride since the start of the year as domestic economic headwinds and hesitancy among clients led to a lack of new work to replace completed contracts," S&P Global Market Intelligence Economics Director Tim Moore said.

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