UK construction downturn eases as new work falls faster

UK construction’s downturn eased in September, but a sharper fall in new orders, faster job cuts and renewed declines in subcontractor use highlighted continued pressure on the sector.

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UK construction activity contracted at its slowest pace since January in September, but firms reported a sharper fall in new work and further job cuts.

The S&P Global UK Construction Purchasing Managers’ Index rose to 46.1 from 44.3 in August. It remained below the 50 mark separating growth from contraction.

The September survey, reproduced by ConstructUK on 6 October, showed employment falling at its fastest rate in five months. Subcontractor usage also fell again.

Housebuilding remained the weakest segment, with an activity reading of 40.7. Commercial construction recorded 48.5, its mildest decline since May 2025. All three main construction categories contracted more slowly.

New work fell at its quickest pace since June. Respondents pointed to delayed decisions on major projects and sharply higher input costs.

Input-cost inflation eased to a seven-month low, although purchasing prices continued to rise sharply. Confidence in activity over the coming year fell to its lowest level since May.

Responding to the figures, Andy Hulme, chief executive of The Hyde Group, said affordable housing could help sustain building activity as the private sales market slowed.

“Housing associations working alongside long-term capital can deliver affordable homes at scale,” he said.

Hulme argued that deploying investment sooner would help construction recover, citing Hyde’s partnerships combining pension capital with grant funding.

Scott Cabot, head of residential research at Bidwells, said scheme viability remained a major obstacle for housebuilders.

He pointed to higher borrowing costs, construction inflation and building safety requirements as pressures on residential development.

Alex Mercer
Alex Mercer
Alex Mercer covers construction, infrastructure and scaffolding projects for ScaffMag, focusing on the developments driving demand and the access solutions behind them.

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