| Actual | Previous | |
| Index | 46.4 | 40.1 |
Highlights
The UK construction sector entered 2026 in a less distressed, though still contractionary, position. January data point to the slowest fall in activity for seven months, signalling that the sharp downturn seen at the end of 2025 is losing momentum. The headline PMI rose sharply to 46.4 from December's deep trough, its highest level since mid-2025, suggesting that demand conditions are stabilising even if overall activity remains below the expansion threshold.
Performance across subsectors remains uneven. Residential construction continues to underperform, reflecting weak housing demand and a thin pipeline of new projects. Civil engineering also remains under pressure, while commercial construction stands out as the most resilient segment, supported by post-Budget clarity and improving investment sentiment. This divergence underlines a shift away from housing-led growth towards more selective, confidence-sensitive investment.
Encouragingly, new work fell at its slowest pace in three months, and business optimism reached its highest level since May 2025, with expectations supported by easing borrowing costs and anticipated infrastructure spending. However, rising input prices, squeezed margins, and ongoing job losses indicate that cost pressures and risk aversion continue to constrain a full recovery in the near term.
Definition
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.
Description
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.