Finance
UK construction sector extends longest run of decline since global financial crisis, PMI shows
Published by Global Banking & Finance Review®
Posted on March 5, 2026
2 min readLast updated: March 5, 2026
Quick Summary
UK construction activity contracted for the 14th straight month in February, with PMI at 44.5, marking the longest decline since the 2007–09 financial crisis. Residential building led the downturn, although business optimism rose to a 14‑month high.
UK Construction Sector Records 14th Month of Decline, PMI Survey Reveals Ongoing Slump
Persistent Downturn in UK Construction Activity
LONDON, March 5 (Reuters) - Activity in Britain's construction sector contracted for the 14th month in a row in February, extending its longest downturn since the global financial crisis despite an improvement in business optimism, a business survey showed on Thursday.
PMI Figures Highlight Continued Contraction
S&P Global's UK Construction Purchasing Managers' Index (PMI) for Britain's construction sector fell in February to 44.5 from January's seven-month high of 46.4.
The reading remained well below the 50-mark that divides growth from contraction, as it has since the start of 2025, and was below a median forecast of 47.0 in a Reuters poll of economists.
Business Optimism Offers a Glimmer of Hope
A rise in business optimism - which hit its highest level in 14 months - marked a rare bright spot.
Tim Moore, economics director at S&P Global Market Intelligence, said February's decline was faster than seen on average since the run of sub-50 readings started in January 2025.
House Building and Order Books Under Pressure
"A sharper downturn in house building was the main factor behind the setback for UK construction activity in February, following some signs of stabilisation at the start of 2026," Moore said.
Falling order books were blamed on a mix of sluggish market conditions, "exceptionally wet weather", which disrupted construction projects, and the steepest rise in cost pressures since July 2025, S&P said.
The residential building activity subindex fell for the eighth month in a row, dropping to 37.0 in February from 39.3 in January. Commercial and civil engineering activity also fell.
Sector Performance and Economic Impact
The weakness stands at odds with Prime Minister Keir Starmer's government target to build 1.5 million homes over its five-year parliamentary term, a rate of construction not achieved since the 1970s.
The gloom in the construction sector - which accounted for more than 6% of British economic output in 2025 - contrasted with a more upbeat picture in the services PMI.
The all-sector PMI - which includes manufacturers as well - stood at 52.9 last month, slightly below January's 53.1, which was the highest since August 2024.
(Reporting by Suban Abdulla; Editing by Hugh Lawson)
Key Takeaways
- •Construction PMI slipped to 44.5 in February, well below the 50 growth threshold, extending the longest contraction since the global financial crisis (investing.com)
- •Residential building was the weakest segment, with strong cost pressures and weather disruptions cited as key drags (investing.com)
- •Business optimism improved, reaching its highest level in over a year, offering a rare bright spot amid broader sector weakness (tradingeconomics.com)
References
Frequently Asked Questions about UK construction sector extends longest run of decline since global financial crisis, PMI shows
1How long has the UK construction sector been in decline?
The UK construction sector has contracted for 14 consecutive months as of February.
2What is the latest value of the UK Construction PMI?
The S&P Global UK Construction PMI fell to 44.5 in February, down from 46.4 in January.
3What factors contributed to the decline in UK construction activity?
Falling order books, sluggish market conditions, exceptionally wet weather, and rising cost pressures contributed to the decline.
4Which area of the construction sector suffered the most in February?
House building experienced the sharpest downturn, with its activity subindex dropping to 37.0.
5How does the construction sector decline compare to other sectors in the UK?
Unlike construction, the all-sector PMI, which includes services and manufacturing, remained above 50, indicating growth.