Housebuilding slump deepens as construction sector marks year-long decline

S&P Global’s UK construction PMI was 40.1 in December, signaling a twelfth consecutive month of contraction and the deepest housebuilding slump since early Covid; civil engineering remained the weakest category while some firms noted cautious optimism linked to infrastructure spending.

UK construction activity remained subdued at the end of 2025, with housebuilding in its deepest slump since early in the Covid period and the wider sector in a year-long decline. The S&P Global UK construction purchasing managers’ index (PMI) read 40.1 in December, up from 39.4 in November but still below the 50 threshold that separates growth from contraction. Housing, commercial construction and civil engineering all continued to contract sharply. Builders reported fragile client confidence and smaller workloads, with many saying clients delayed investment decisions ahead of the autumn budget. Key findings: - The S&P Global UK construction PMI was 40.1 in December, indicating contraction for the 12th consecutive month. - The December reading rose from 39.4 in November but remained below the neutral 50-point level. - Housebuilding and commercial work recorded the deepest slumps since early in the Covid period, and civil engineering was the weakest-performing category. - Survey respondents cited fragile client confidence and delayed investment decisions; some firms reported tentative optimism tied to projected infrastructure spending and easing borrowing costs. Summary: The survey shows subdued activity across the construction industry, with housebuilding particularly affected and the sector in decline for a year. Firms reported reduced workloads and delayed client spending, while a number of respondents expressed cautious optimism about future infrastructure projects and lower borrowing costs. Undetermined at this time.