Latest construction activity from firms survey

S&P Global report shows construction activity still in decline

UK construction activity declined for the fifth consecutive month in May, albeit at the slowest rate in four months, 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 47.9 in May, slightly up from 46.6 in April. Anything above 50 signifies an overall increase in activity; anything below 50 represents a decrease.

Job shedding was also up in May, accelerating to its fastest rate since August 2020 as subcontractor usage reached a five-year low.

Dr David Crosthwaite, BCIS chief economist, said: ‘More bleak news for the construction sector, even with the slower fall in activity. Low demand, low confidence and high levels of uncertainty continue to deter investment decisions and stymie any growth. Coupled with high employment costs, it’s no wonder businesses are letting go of staff. Let’s hope the outcome of the Spending Review has a positive impact for the sector’.

At a sector level, housebuilding had the worst performance amid reports of subdued demand conditions and the accelerated fall in residential work on the previous month.

Where commercial work saw a minor decrease in May, contraction in civil engineering activity continued a strong downturn, albeit at a lesser rate than in April. Both sectors experienced a decline in work for the fifth consecutive month.

Survey respondents cited cutbacks on capital spending and delayed decision-making among clients as key reasons for reduced order intakes.

S&P Global also reported:

• New work fell, but to the least marked extent in four months.
• A six-month fall in input buying, but less pressure on supplier capacity and better delivery times.
• The fastest improvement in vendor performance since September 2024, although still some reports of international shipping delays.
• Suppliers have sought to pass on increased payroll costs.
• 39% expect a rise in output in the next 12 months, 16% predict a decline.
• 30% reported a rise in average cost burdens, 5% reported a reduction.
• Input price inflation remains high, but overall cost pressures are lessening.

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^{(1) S&P Global UK Construction PMI  - here}