Britain's construction sector shrank at its fastest pace since June in October, as housebuilding suffered its worst month of the year. The S&P Global UK Construction Purchasing Managers' Index (PMI) fell to 43.6, down from 46.1 in September, remaining below the 50.0 mark that separates growth from contraction for the 22nd consecutive month.

Residential construction was by far the weakest part of the sector. Its index fell to 35.1, the lowest reading since December 2025, and the steepest drop in housebuilding activity so far this year. Only the Covid-19 pandemic and the global financial crisis saw greater falls in housebuilding, according to the reports. Firms blamed weak consumer confidence, rising borrowing costs and heightened risk aversion.

Civil and commercial work also fell

Civil engineering activity also contracted, with an index reading of 45.9, although that was the slowest pace of decline since May 2025. Commercial activity showed some resilience at 46.3, easing from September's 16-month high. Tim Moore, economics director at S&P Global Market Intelligence, said October's data was a setback after some signs of stabilisation in the previous month, with business activity falling at the fastest pace since June amid the steepest reduction in residential work so far this year.

The survey, compiled from responses from around 150 construction companies collected between 12 and 29 October, came in below every forecast in a Reuters poll of economists, whose median estimate had pointed to no change. Construction now stands out against the wider economy: the services PMI reached 52.8 in October, an eight-month high, and the all-sector PMI — combining construction, manufacturing and services — rose to 52.1 from 51.5, its strongest reading since February.

Sources: Reuters, Housebuilding slump drags down UK construction activity, PMI shows, 5 November 2026; S&P Global UK Construction PMI via The Intermediary, 5 November 2026; Sharecast, 5 November 2026.