Published by Global Banking & Finance Review®
Posted on August 6, 2025
2 min readLast updated: January 22, 2026
Add as preferred source on GoogleUK construction activity fell sharply in July, marking the largest decline in over five years, according to S&P Global's survey, raising concerns about housing targets.
By David Milliken
LONDON (Reuters) -Activity in Britain's construction sector fell by the most in more than five years last month, according to a survey that raises questions about whether the government will achieve its target of building 1.5 million homes by mid-2029.
S&P Global's monthly purchasing managers' index for the construction sector fell to 44.3 in July from 48.8 in June, its lowest since May 2020 and below all forecasts in a Reuters poll of economists.
"Dissecting the latest contraction, we can see a fresh and sharp drop in residential building, as well as an accelerated fall in work carried out on civil engineering projects," Joe Hayes, principal economist at S&P Global Market Intelligence, said.
Britain's government has pledged planning reforms to enable the construction of 1.5 million homes before the next election due by mid-2029, which will require a pace of construction last achieved in 1970.
Finance minister Rachel Reeves also loosened budget rules last year to allow more borrowing for public infrastructure investment.
However, building firms in the S&P survey reported site delays, a lack of tender opportunities and a reluctance from customers to commit to contracts. The pace of decline was smallest for commercial work such as shops and offices and greatest for civil engineering.
Staff numbers fell for a seventh month in a row while new orders dropped at the second-fastest pace since 2020.
The downbeat picture contrasts with slightly more upbeat past official data, which showed construction output grew by 1.2% in the three months to the end of May, including a 0.9% increase in new work and a 1.5% rise in repair and maintenance.
(Reporting by David Milliken; Editing by Hugh Lawson)
The S&P Global's monthly purchasing managers' index for the construction sector fell to 44.3 in July from 48.8 in June.
The decline was marked by a sharp drop in residential building and an accelerated fall in civil engineering projects.
The government has pledged planning reforms to enable the construction of 1.5 million homes and loosened budget rules for public infrastructure investment.
Building firms reported site delays, a lack of tender opportunities, and a reluctance from customers to commit to contracts.
The recent downbeat picture contrasts with past official data showing construction output grew by 1.2% in the three months to the end of May.
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