| Actual | Previous | |
| Index | 43.6 | 46.1 |
Highlights
The UK construction sector experienced a deepening contraction in October 2026, reflecting persistent weakness in housing demand, deteriorating order books and renewed cost pressures. The UK construction PMI declined to 43.6 from 46.1 in September, marking the twenty-second consecutive month of contraction and the sharpest deterioration since June.
Residential construction remained the principal drag, with its activity index falling to 35.1, the lowest since December 2025, as elevated borrowing costs, subdued consumer confidence and heightened risk aversion constrained housebuilding. Commercial activity (46.3) and civil engineering (45.9) also contracted, although infrastructure investment in data centres, energy networks and utilities provided some resilience.
Meanwhile, new orders declined at their fastest pace since June, prompting further reductions in purchasing activity. Despite weakening demand, supply-chain disruptions persisted, while rising fuel, energy and material costs pushed input price inflation to a four-month high, intensifying pressure on contractors’ margins.
Business confidence also weakened, with only 34 percent of firms anticipating higher activity against 27 percent expecting a decline. In summary, the sector faces a challenging outlook, as weak private demand and persistent cost pressures threaten recovery, leaving infrastructure investment as a potential source of stabilisation.
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.