Construction is in its longest period of decline since the financial crash of 15 years ago, according to the latest purchasing managers’ index (PMI) data.
The S&P Global index for October registered 44.1, down from 46.2 in September. A number below 50 shows industry activity is contracting.
October was the tenth month in a row that the index showed a decline. It was also the month with the steepest recorded decline since May 2020, when many construction sites were closed due to the Covid lockdown.
Civil engineering was again the weakest-performing part of the sector, according to S&P Global, which said that survey respondents widely cited a lack of new work to replace completed projects.
Residential work also decreased markedly, declining at its biggest rate for eight months.
Commercial building activity was similar in October to where it had been in September.
Although the PMI data has shown 10 months of decline since the start of 2025, Office for National Statistics data released in August contradicted this. It showed construction output growing by 1.2 per cent from April to the end of June.
According to the S&P Global survey, many construction companies noted sluggish market conditions, fewer tender opportunities and delays with the release of new projects. There were also reports that elevated political and economic uncertainty had discouraged client spending.
The rate of job cuts in the industry was the steepest for five years, with voluntary leavers often not being replaced.
Kelly Boorman, national head of construction at auditors and consultancy RSM UK, said the state of the industry does not reflect the usual trend for this time of year, with housebuilders traditionally busy attempting to meet pre-Christmas demand.
She said a rebound is unlikely until next spring.
“Despite slightly improved mortgage availability and expectations of falling interest rates, housing activity also decreased, driven by market uncertainty ahead of the Autumn Budget. We’re seeing contractors stall on project completions in anticipation of fiscal announcements, further tempered by ongoing concerns around unrealistic government housing targets and affordability challenges for consumers,” she said.
“Project starts across housing and infrastructure continue to lag, with mobilisation delays, access to affordable debt and persistent labour shortages presenting further challenges,” she added.
Lloyds Bank director of infrastructure and construction Max Jones said he believes that many firms are gearing up to manage their activities when bigger civils projects come online next year.
“Contractors and suppliers are therefore using this time to sharpen their operations by tightly managing working capital, streamlining supply chains, and expanding into consultancy to boost revenue,” he said.
