UK construction sector contracts at slowest rate since January but housing remains the worst-performing area
From the Newshound archive · first published 6 October 2026 · last updated 7 October 2026.
Britain's construction industry shrank at its most modest pace in eight months in September, with the S&P Global UK Construction PMI rising to 46.1 from 44.3 in August, beating economist forecasts of 44.9. The sector has nonetheless remained in contraction every month since January 2025, with rising borrowing costs, geopolitical tensions and surging input costs all dragging on output. Job cuts continued for the ninth consecutive month, with the latest fall in employment the fastest in five months.
House building was the worst-performing sub-sector, with its PMI at just 40.7, weighed down by rising borrowing costs and weak market conditions.
New orders fell at their sharpest pace in three months as clients deferred decisions on major projects amid geopolitical uncertainty and spiralling costs.
Around 25% of firms reported higher purchasing costs, driven by fuel surcharges, elevated shipping expenses, dearer raw materials and Middle East supply chain disruption.