Latest construction activity from firms survey

Construction activity falls sharply after promising start to 2026

UK construction activity declined for the fourteenth consecutive month in February 2026, at a faster rate than was reported in 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 44.5 in February, down from the seven-month high of 46.4 in January. A reading above 50 indicates growth in activity, while a reading below 50 signals contraction.

Residential building was the weakest performing sector in February and drove the overall downturn.

Commercial and civil engineering activity were also in decline, though the latter saw the slowest rate of contraction since September 2025.

Survey respondents cited weak order books and a lack of new project starts as the main factors behind the downturn, alongside some weather-related delays.

Input cost inflation reportedly reached its highest level since July 2025. February data also pointed to low volumes of new business, continuing a monthly trend going back to January 2025. Sluggish demand conditions were cited as the main reason for the latest decline.

Conversely, business optimism improved in February, reaching a 14-month high.

Commenting on the findings, Karl Horton, data services director at BCIS, said: ‘Despite continued weak performance, particularly in the residential sector, business sentiment remains relatively positive. There is a general expectation that demand will improve, with potential contract awards on major projects offering some cause for optimism.

‘However, the latest S&P report does not reflect the turbulent economic backdrop linked to conflict in the Middle East. Prolonged disruption could have a greater impact on energy-intensive sectors, including those supplying construction products and materials, increasing costs for contractors and subcontractors. If clients are unwilling to absorb these additional pressures in their budgets, it could weaken expectations for a recovery in activity levels.’

S&P Global also reported:

• 42% of survey respondents forecast a rise in output levels in the next 12 months; 12% anticipate a decline.
• More stable employment levels.
• Sharp fall in purchasing activity.
• Sustained improvement in supplier performance, linked to weaker demand.
• Higher prices for concrete, copper, insulation and steel.

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