UK construction output showed signs of stabilisation in September 2025, with the slowdown in activity easing to its weakest pace in three months. The UK construction PMI rose slightly to 46.2 from 45.5 in August, though it remained below the neutral 50.0 threshold, signalling continued contraction. The sector's decline was largely driven by subdued demand and client uncertainty, though new work fell at its slowest rate so far this year.

Residential building (46.8) and civil engineering (42.9) both experienced softer declines, while commercial construction (46.4) weakened further. Persistent caution across the industry was reflected in nine consecutive months of employment reduction, as firms froze hiring or avoided replacing departing staff. Supply conditions improved modestly, yet input costs rose again, driven by pay, energy, and transport inflation.

Although some optimism was noted regarding infrastructure and energy-related projects, overall business sentiment remained muted, constrained by high costs, policy uncertainty, and reduced capital spending ahead of the Autumn Budget. The findings suggest a fragile recovery, with cautious hopes pinned on government investment and economic stabilisation to revive growth in the construction sector.

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.