The UK’s construction industry has begun to “stabilise” following a steep downturn, despite activity remaining in decline for the longest period since the 2008 financial crisis, new figures show.
S&P Global’s monthly survey, which is watched closely by economists, found confidence among construction companies improved last month.
Its UK construction PMI showed a reading of 44.7 in July, up from 38.4 in June.
Any reading above the 50.0 threshold indicates activity in the industry is increasing, while anything below means it is contracting.
The construction industry has recorded a decline in business activity every month since January 2025, marking the longest slump since the global financial crisis.
The slump has affected all subsectors that the survey tracks – housebuilding, civil engineering and commercial construction – with conditions worsening over recent months since the start of the US-Israeli conflict with Iran.
However, slower rates of decline were recorded across the board in July, led by the housebuilding sector where activity reached the highest level since October.
Some construction firms pointed to a recent revival in opportunities for new work, including commercial development, residential projects and transport infrastructure, the survey found.
This came despite many respondents to the survey continuing to note that geopolitical uncertainty and subdued economic conditions were weighing on customer demand.
Tim Moore, economics director at S&P Global Market Intelligence, said July’s data signals the construction industry “has started to stabilise after a sharp downturn throughout the second quarter of 2026”.
He said: “Business activity levels continued to decline in all three main categories, but in each case the rate of contraction was much slower than in June.
“Survey respondents commented on signs of a turnaround in client demand and a revival in new tender opportunities in some cases, despite subdued underlying market conditions.
“This contributed to more upbeat business activity expectations for the year ahead, with confidence levels the highest since February.”
Firms continued job-cutting in July but also at a slower rate than previous months, the survey found.
Meanwhile, input price inflation – meaning prices charged by suppliers – eased further from May’s four-year high, although firms continued to report higher costs typically linked to fuel surcharges and raw materials.
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