UK construction sector downturn extends to 14th consecutive month

Activity in Britain’s construction sector contracted for the 14th month in a row in February, extending its longest downturn since the global ​financial crisis despite an improvement in business optimism, a business survey ‌showed this week.

S&P Global’s UK Construction Purchasing Managers’ Index (PMI) for Britain’s construction sector fell in February to 44.5 from January’s seven-month high of 46.4.

The reading remained well below the ​50-mark that divides growth from contraction, as it has since the ​start of 2025, and was below a median forecast of 47.0 ⁠in a Reuters poll of economists.

A rise in business optimism – which hit ​its highest level in 14 months – marked a rare bright spot.

Tim Moore, economics ​director at S&P Global Market Intelligence, said February’s decline was faster than seen on average since the run of sub-50 readings started in January 2025.

“A sharper downturn in house ​building was the main factor behind the setback for UK construction activity ​in February, following some signs of stabilisation at the start of 2026,” Moore said.

Falling order ‌books ⁠were blamed on a mix of sluggish market conditions, “exceptionally wet weather”, which disrupted construction projects, and the steepest rise in cost pressures since July 2025, S&P said.

The residential building activity subindex fell for the eighth month in a ​row, dropping to 37.0 ​in February from ⁠39.3 in January. Commercial and civil engineering activity also fell.

The weakness stands at odds with Prime Minister Keir Starmer’s ​government target to build 1.5 million homes over its ​five-year parliamentary ⁠term, a rate of construction not achieved since the 1970s.

The gloom in the construction sector – which accounted for more than 6 per cent of British economic output in 2025 – ⁠contrasted ​with a more upbeat picture in the services PMI.

The ​all-sector PMI – which includes manufacturers as well – stood at 52.9 last month, slightly below January’s 53.1, which ​was the highest since August 2024.