UK construction downturn deepens in October amid housebuilding slump

5th Nov 2026 10:53

(Sharecast News) - The downturn in the UK construction sector deepened in October amid a slump in housebuilding, according to a survey released on Thursday.

S&P Global's UK construction purchasing managers' index declined to 43.6 from 46.1 in September. The reading was below the 50.0 mark that separates contraction from expansion for the twenty-second month in a row. It also marked the steepest rate of contraction since June.

Residential activity was the weakest performing segment, with the latest reading of 35.1 the lowest since December 2025. S&P Global said anecdotal evidence cited low consumer confidence, elevated risk aversion and headwinds from rising borrowing costs.

Civil engineering work also fell in October, although the pace of contraction was the slowest since May 2025. Commercial activity showed some resilience, although the latest reading of 46.3 eased from September's 16-month high.

Tim Moore, economics director at S&P Global Market Intelligence, said: "October data indicated a setback for the UK construction sector after some signs of stabilisation in the previous month. Business activity decreased at the fastest pace since June amid the steepest reduction in residential work so far this year.

"Construction companies commented on severe headwinds in the house building sector from rising borrowing costs, weak consumer confidence and elevated economic uncertainty. However, there were reports of strong demand for data centre projects, alongside rising workloads in the energy and utilities sectors. Resilient infrastructure spending contributed to the slowest fall in civil engineering activity since May 2025.

"On the supply side, there were again delays with deliveries for construction products and materials. Moreover, input price inflation intensified, largely due to fuel surcharges and higher energy costs. Almost half of the survey panel (48%) indicated an increase in their input costs in October, up from 25% in September.

"Faced with rising input price inflation, higher borrowing costs and reduced order books, construction firms were unsurprisingly cautious about the year ahead business outlook. The degree of optimism towards activity growth eased again in October and now sits at one of the lowest levels since the end of 2022."