The UK’s construction sector weakened further last month amid a deeper downturn in housebuilding, according to new figures. The S&P Global UK construction PMI showed a reading of 44.3 in August, dipping from 44.7 in July. Any reading above 50.0 indicates increasing activity, while anything below means contraction.
The latest figures show the industry remained firmly in contraction territory, declining since January 2025, and was below the 46 reading predicted by economists. Tim Moore, economics director at S&P Global Market Intelligence, stated that UK construction companies experienced another solid reduction in output volumes, with a faster downturn in housebuilding being the main reason for weaker performance in August. Surveyed firms reported subdued demand and fewer new projects, particularly in housebuilding.
The housing sector’s decline accelerated, while commercial construction and civil engineering firms saw a slower rate of decline. Construction companies also reported lower new order intakes in August, though this was relatively modest and the slowest fall since September of the previous year. Thomas Pugh, chief economist at RSM UK, noted that the latest construction PMI marked the 20th consecutive sub-50 reading, confirming ongoing struggles against higher energy prices, elevated interest rates, and persistent uncertainty over planning reforms.
Even a scorching summer, which typically boosts activity, provided little relief, as official data showed output falling for three consecutive months. Pugh added that weaker real income growth and a sharp repricing in mortgage rates continue to weigh on demand.
Source: The Independent
