| Actual | Previous | |
| Index | 45.6 | 44.5 |
Highlights
The March 2026 construction data depicts a sector in prolonged contraction with emerging cost-driven stress dynamics. Although the headline PMI rose slightly to 45.6, it remains below the 50 threshold for fifteen consecutive months, confirming persistent output decline rather than recovery.
The downturn is fundamentally demand-constrained and confidence-driven. New orders fell at the fastest pace since late 2025, reflecting heightened client risk aversion amid global uncertainty. Residential construction is particularly weak (38.2), indicating acute sensitivity to interest rates and affordability pressures, while infrastructure shows tentative stabilisationsuggesting policy-supported resilience.
Simultaneously, the sector faces a cost-side shock. Input price inflation has surged to its highest level since 2022, driven by energy, transport, and material costs linked to geopolitical tensions. This creates a margin squeeze, where declining workloads coincide with rising costs.
Operational responses reinforce the contraction narrative as firms are cutting employment, reducing subcontractor use, and scaling back purchasingclear signs of defensive restructuring. Supply-side frictions are re-emerging, with longer lead times and material shortages, compounding inefficiencies.
Overall, the sector reflects weak demand and rising costs, with only limited support from infrastructure activity. Near-term prospects depend on stabilising input costs and restoring client confidence.
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.