UK construction output declined again in April 2025, marking the fourth straight monthly fall, but the rate of contraction slowed, offering cautious optimism. The headline PMI rose slightly to 46.6, up from 46.4 in March, still below the 50.0 threshold that signals growth, yet the softest decline in three months. Residential construction provided a relative bright spot, contracting at the slowest pace this year (47.1), as firms remained hopeful about housing demand.

In contrast, commercial activity plunged, recording its steepest drop since May 2020 (45.5), reflecting subdued business confidence and deferred investment decisions. Civil engineering fared worst (43.1), with a sharp drop in activity due to a lack of new projects. Order books shrank, staffing levels were cut for the fourth month, and purchasing activity saw its most significant decline in nearly five years.

Despite weaker demand, cost burdens rose sharply, driven by material and payroll price increases. Supplier performance improved slightly amid softer demand, though some international shipping issues persisted. Yet, optimism emerged, with 41 percent of firms expecting output growth over the next yeardriven by hope in the residential sectoreven as broader economic concerns linger.

The Construction Purchasing Managers' Index (PMI) provides an estimate of business activity in the UK construction sector for the preceding month based on data compiled from monthly replies to questionnaires sent to purchasing executives in over 170 construction companies. The panel is stratified geographically and by Standard Industrial Classification (SIC) group, based on the regional and industry contribution to gross domestic product. Results are synthesised into a single index which can range between zero and 100. A reading above (below) 50 signals rising (falling) activity versus the previous month and the closer to 100 (zero) the faster is activity growing (contracting). The data are compiled by the Chartered Institute of Purchasing and Supply (CIPS) and S&P Global.

The survey is based on techniques successfully developed in the USA over the last 60 years by the National Association of Purchasing Management. It is designed to provide one of the earliest indicators of significant change in the economy. The data collected are not opinion on what might happen in the future, but hard facts on what is actually happening at 'grass roots' level in the economy. As such the information generated on economic trends pre-dates official government statistics by many months.