UK construction experienced its sharpest downturn in over five years in October 2025, as activity weakened across most subsectors. The headline UK Construction PMI fell to 44.1, signalling a deep contraction and marking a tenth consecutive month below the 50.0 threshold. Civil engineering recorded the most severe decline, mainly driven by a lack of replacement projects once existing work completed. Residential output also fell notably, while commercial building showed marginal resilience.

Fewer new orders, sluggish tender activity and heightened political and economic uncertainty continue to suppress client spending. In response to shrinking workloads and rising payroll pressures, firms reduced staffing levels at the fastest pace since August 2020, often through non-replacement of leavers. Reduced demand led to a sharp decline in material purchases, which eased supply chain pressures and contributed to input cost inflation easing to its lowest level in a year.

Despite current weakness, confidence has improved slightly. Around one-third of firms expect output growth over the coming year, supported by lower borrowing costs and potential demand in areas such as energy infrastructure. While conditions remain historically subdued, this cautious optimism indicates that sector sentiment may be beginning to stabilise.

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.