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Construction Sector Shrinks at Fastest Pace Since Pandemic, Survey Suggests

The UK construction sector saw steep declines in civil, residential, and commercial building with new orders and employment falling sharply, marking the weakest residential activity since early 2020.

  • On last month, S&P Global's PMI showed the UK construction sector contracted to 39.4, the lowest since May 2020, amid pre-Budget caution.
  • Firms' negativity reflected worries about fiscal policy, with surveyed businesses reporting it was 'magnified by expectations of tax rises at the autumn Budget', while other surveys linked the build-up to weaker demand and motor sales slipping nearly 2%.
  • Survey data showed steep sub-sector declines across civil engineering, residential construction, and commercial building, with new orders metric reporting 17% increases versus 44% falls.
  • The downturn threatens delivery of the 1.5 million homes target across England, while S&P Global's cross-sector activity measure suggested near-zero growth, adding fuel to criticism of UK government messaging.
  • Despite the plunge, the PMI had been contractionary across 2025, and analysts including Matt Swannell said activity would likely remain muted in the coming months despite some expecting a rebound.
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UK construction sector shrinks at fastest rate since 2020

The latest figures were significantly worse than economists had expected, as firms partly blamed caution ahead of the autumn Budget.

·London, United Kingdom
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Business Times broke the news in on Thursday, December 4, 2025.
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