| Actual | Previous | |
| Index | 44.7 | 38.4 |
Highlights
The UK construction sector showed early signs of stabilisation in July, although recovery remains fragile. The construction PMI rose sharply from 38.4 in June to 44.7, its highest level for four months. Nevertheless, its position below the neutral 50.0 threshold confirms that industry activity continued to contract.
All three construction categories declined more slowly. Commercial construction demonstrated the greatest resilience at 46.8, while civil engineering remained the weakest at 38.3. Housebuilding also contracted, but at its slowest rate since October 2025. More encouragingly, new orders recorded their smallest decline for ten months, supported by improving tender opportunities in commercial, residential and transport infrastructure projects.
Operational pressures also moderated. Employment losses slowed, supplier performance improved, and input-cost inflation fell to a five-month low. However, weaker purchasing activity and increased subcontractor availability still reflect underused capacity rather than renewed expansion.
The outlook presents a cautious contrast between present weakness and future confidence as 38 percent of firms expect growth, compared with 17 percent anticipating decline. In essence, the sector appears to be approaching a turning point, but geopolitical uncertainty, subdued domestic demand and persistent cost pressures may delay a sustained recovery.
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.