BCIS CapX provides a comprehensive, detailed and easy-to-use method of measuring cost movement for building and civil engineering. Widely used in the construction and infrastructure sector to help fairly allocate risk between the client and sub-contractors.
Published: 07/10/2026
Softer order books tempered improvement in construction activity in September
UK construction activity declined for the twenty-first consecutive month in September 2026, albeit at the slowest pace since January, according to the latest S&P Global UK Construction Purchasing Managers’ Index (PMI)(1).
The PMI, which tracks changes in the volume of business activity through a monthly survey of around 150 construction firms, registered 46.1 in September, up from 44.3 in the previous month. A reading above 50 indicates growth in activity, while a reading below 50 signals contraction.
Slower rates of contraction across all three major construction sectors contributed to the rise in the index. Commercial construction performed strongest, recording its smallest decline since May 2025, while housing remained the weakest performing sector.
However, the improvement in overall activity was accompanied by a sharper fall in new orders. New orders declined at the fastest pace in three months, with survey respondents citing delayed decision making on major projects and sharply rising input costs.
Demand for construction products and materials also continued to fall, extending the downturn that began in December 2024. Suppliers’ delivery times lengthened to the greatest extent since May, with the survey findings linking this to international shipping delays and disruption associated with the Middle East conflict.
Dr David Crosthwaite, chief economist at BCIS, said: ‘While the uptick in S&P Global’s index is encouraging, survey responses suggest construction businesses and their supply chains remain under pressure. New work is still contracting while inflationary pressures from fuel, freight and raw materials persist.
‘However, survey responses also suggest the market is cautiously optimistic about a return to higher levels of activity. Much of that confidence will likely depend on the outcome of the Budget.
‘Forthcoming infrastructure work is reportedly an important source of optimism. Any significant reshaping of the national pipeline will therefore impact business confidence and potentially influence pricing behaviour if firms expect future workloads to weaken.
‘The Budget is also likely to influence client and developer decision making, as we saw in the lead up to and following last year’s Budget. This time, geopolitical uncertainty and high borrowing costs add to the factors clients may be weighing. What matters is whether these pressures continue to constrain appetite for new work, even as tender price growth remains relatively stable.’
Other survey results revealed further jobs cuts across the industry in September. The latest fall in employment was the fastest for five months. Subcontractor usage also declined.
Looking ahead, around 31% of survey respondents expect business activity to rise over the next 12 months, compared with 21% who expect it to decline.
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(1) S&P Global UK Construction PMI - here
