UK Construction PMI Shows Signs of Easing Slump but Activity Still Contracts

In January 2026, the S&P Global UK Construction Purchasing Managers’ Index (PMI) rose to 46.4, marking the highest reading since mid-2025 and indicating that the pace of contraction in the sector has eased. Although the index remains below the neutral 50 threshold, which separates expansion from contraction, this increase signals that the worst phase of decline may be behind the industry.

The rebound from December’s five-and-a-half-year low suggests some early stabilisation in construction activity. Weak residential building demand continued to weigh heavily on the overall PMI, but commercial work showed comparatively smaller declines, reflecting modest improvements in investment sentiment following greater clarity around post-budget economic policy.

Builders and industry participants reported greater enquiries and a stronger outlook for new projects. Expectations for business activity over the year ahead climbed to an eight-month high, and job losses moderated compared with previous months, indicating that firms are cautiously optimistic about the near-term future.

Despite these signs, the sector remains in contraction, with output declining for the twelfth consecutive month. The ongoing shortfall in new work and lingering economic uncertainty continue to dampen activity levels across major construction segments.

As reported by experts at International Investment, the latest UK Construction PMI data suggest a slowing of the downturn and early signs of sector stabilisation in 2026. Nevertheless, the continued reading below the growth threshold highlights that recovery is still nascent and will likely unfold gradually as demand and investment conditions improve.