2025.03.0609:20:00UTC+00UK Construction Logs Sharpest Downturn Since 2020

The UK construction sector registered the sharpest contraction since May 2020 on notable falls in orders and output, survey results from S&P Global showed on Thursday.

The construction Purchasing Managers' Index fell unexpectedly to 44.6 in February from 48.1 in January. The reading was seen at 49.5.

The latest reading signaled the worst performance in construction activity in nearly five years.

Residential building shrank for the fifth straight month and was the weakest performer in February. The decline reflected weak demand conditions, headwinds from elevated borrowing costs and a lack of new work to replace completed projects.

Civil engineering activity contracted the most since October 2020. Output levels fell only marginally in commercial construction.

New order intakes dropped sharply and to the greatest extent since May 2020. There was a decline in staffing numbers with the pace of job shedding the sharpest since November 2020.

Input buying dropped for the third straight month. At the same time, weaker demand for construction products and material contributed to an improvement in overall supplier performance for the first time since October 2024.

The survey showed that inflationary pressures intensified in February. Contractors reported the sharpest rise in average cost burdens for nearly two years.

Further, business activity expectations remained positive, despite a steep decline in order books and concerns about a lack of new tender opportunities.