UK Construction Sector Ends 2025 Stuck in Downturn Amid Sluggish Demand

06:57 AM EST, 01/07/2026 (MT Newswires) -- Britain's construction industry remained in contraction territory in December 2025 amid lower new orders and sluggish demand conditions, according to S&P Global's business survey data published Wednesday. The S&P Global UK Construction PMI rose to 40.1 from the prior month's 39.4, against the consensus estimate of 42.5. Despite the improvement, the index stayed below the neutral 50 threshold for the 12th month in a row and marked its second-lowest reading since May 2020. Steep declines in housing, commercial and civil engineering activity levels weighed on the construction sector, with the latter logging the weakest performance among the three segments, albeit at a softer rate of decline compared with November 2025, while housing and commercial construction activities both dropped at the fastest pace since May 2020. Total new work across the sector also fell in December 2025 on the back of lower new business volumes. The rate of decline, however, moderated since the previous month. "UK construction companies once again reported challenging business conditions and falling workloads in December, but the speed of the downturn moderated from the five-and-a-half-year record seen in November. Many firms cited subdued demand and fragile client confidence," said Tim Moore, economics director at S&P Global Market Intelligence. "Despite a lifting of Budget-related uncertainty, delayed spending decisions were still cited as contributing to weak sales pipelines at the close of the year." Meanwhile, the delivery times of suppliers improved for the fifth straight month, leading to greater stock availability and fewer issues related to transportation. Input cost inflation also reached a 14-month low at the end of 2025, supported by lower purchasing activity and greater competition among vendors in the supply chain. Looking ahead, business activity expectations for 2026 rebounded to a five-month high in December 2025, with construction companies anticipating an increase in water and energy infrastructure spending, lower interest rates and an improvement in domestic economic conditions.