IN Brief:
- The S&P Global/CIPS headline PMI fell to 44.5 in February, extending the sector’s run of contraction to 14 months.
- Housebuilding remained the weakest segment, while commercial work and civil engineering also stayed below the growth threshold.
- Business optimism improved, but new orders, site disruption, and cost pressure continue to weigh on near-term delivery.
UK construction activity slipped deeper into contraction in February, with the S&P Global/CIPS UK Construction PMI falling to 44.5 from 46.4 in January and coming in below market expectations for a modest improvement.
The headline reading marked a 14th consecutive month below the 50 threshold that separates growth from contraction, extending the longest downturn for the sector since the global financial crisis. The latest survey linked the softer result to falling order books, subdued client demand, exceptionally wet weather that disrupted projects, and the steepest rise in input cost pressures since July 2025.
Housebuilding remained the weakest segment by some distance. The residential activity index fell to 37.0 from 39.3, making housing the main drag on overall output in February. Civil engineering also remained deep in contraction, at 41.0, while commercial work stayed below the growth line as companies continued to report weak replacement pipelines and cautious client decision-making.
The data was not uniformly negative. Business optimism improved to its highest level in 14 months, suggesting parts of the market still expect lower rates, better contract wins, or a broader economic improvement to support activity later in the year. That said, current trading conditions remain strained. New orders are still falling, weather disruption is compounding already soft demand, and margin pressure is being sharpened by higher costs rather than offset by stronger volumes.
That combination is awkward for a sector the government wants to lean on. Construction accounted for more than 6% of UK economic output in 2025, while ministers remain committed to delivering 1.5 million homes over the course of the current Parliament. A residential activity reading in the high-30s does not sit comfortably with that ambition, even if the headline survey eventually stabilises.
There is also a wider economic split in view. The all-sector PMI, which includes manufacturing and services, stood at 52.9 in February, still signalling expansion across the broader economy. Construction is therefore not just weak in isolation; it is underperforming the rest of the economy at a point when planning reform, infrastructure sequencing, financing costs, and labour availability are all supposed to be helping delivery regain momentum.
March will show whether February was largely a weather-hit setback or another sign that demand remains too soft for a sustained recovery. For now, the sector is still contracting, housebuilding remains the weakest part of it, and the hoped-for rebound has shifted further down the programme.
