Published by Global Banking & Finance Review®
Posted on April 8, 2026
2 min readLast updated: April 9, 2026
Add as preferred source on GoogleUK construction firms in March recorded the largest month‑on‑month rise in cost inflation on record, with a PMI jump to 70.5; new orders slumped and confidence dipped amid Iran war supply disruptions and elevated borrowing costs.
LONDON, April 8 (Reuters) - British construction firms reported the biggest rise in cost inflation from one month to the next on record in March and the Iran war also hit new orders and confidence in the sector, a survey showed on Wednesday.
S&P Global's UK Construction Purchasing Managers' Index (PMI) measure of input cost inflation leapt to 70.5 from 59.5 in February, the biggest such jump since the series began in 1997 and reaching its highest level outright since November 2022.
British manufacturers last week reported the biggest month-on-month jump in the rate at which their cost burdens are increasing since October 1992.
New orders for construction firms fell at the fastest pace since November last year and a recent recovery in expectations for future output among businesses faded.
S&P Global's headline index for the construction sector remained below the 50.0 growth threshold for the 15th month in a row although it edged up slightly to 45.6 from 44.5 in February.
The most recent official construction data showed a 0.2% rise in output in January after shrinking 2% in the final quarter of 2025.
Tim Moore, economics director at S&P Global Market Intelligence, said some businesses reported a turnaround in infrastructure work, especially in the energy sector, but the near-term outlook for the sector as a whole was challenging.
Rising inflation pressures, gloomy economic prospects and higher borrowing costs were worrying executives while shipping delays caused by disruption in the Strait of Hormuz meant supply chain performance worsened for the first time since mid-2025.
The all-sector PMI - which includes manufacturers and services firms, which have reported similar fallout from the war in Iran - dropped to 49.9 from 52.9 in February, reaching its lowest since last September.
(Writing by William Schomberg; Editing by Hugh Lawson)
The record leap in cost inflation was driven by rising input costs, global economic pressures, and supply chain disruptions linked to the Iran conflict.
New orders fell at the fastest rate since November of the previous year, reflecting weaker confidence in the sector.
The headline construction PMI index stayed below 50 for the 15th month, signaling ongoing contraction, though it slightly improved in March.
Supply chain performance worsened for the first time since mid-2025, partly due to shipping delays from disruptions in the Strait of Hormuz.
Some improvement was seen in infrastructure works, especially within the energy sector, according to the report.
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