UK Construction PMI Rises to 44.7 in July, Beating Expectations as Downturn Eases
Key Takeaways
- •The July S&P Global Construction PMI reached 44.7, exceeding the expected 40.0 and improving from June's 38.4 reading.
- •Commercial work was the most resilient construction sub-sector at 46.8, while civil engineering remained the weakest performer at 38.3.
- •New orders declined at their slowest pace since September 2025, offering a potential leading indicator of improving future activity.
- •Input price inflation eased to its slowest rate since February, which could gradually relieve cost pressures on contractor margins.
- •All key construction metrics remain below the 50.0 threshold, indicating the sector continues to contract albeit at a slower pace.
UK Construction PMI Rises to 44.7 in July, Beating Expectations as Downturn Eases
The UK construction sector showed signs of improvement at the start of the third quarter of 2026, with the July S&P Global Construction PMI coming in at 44.7, well above the expected 40.0 and up from June's reading of 38.4. The construction industry accounts for around 6% of UK economic output, making the PMI a closely watched barometer of broader infrastructure investment and building-sector momentum. A PMI reading below 50.0 indicates a contraction in sector activity, while a reading above 50.0 signals expansion.
All three main construction categories recorded a slower decline in business activity during July. Commercial work posted the strongest performance at 46.8, demonstrating the greatest resilience among the sub-sectors. House building activity registered 41.8, marking its slowest pace of decline since October 2025. Civil engineering remained the weakest performer at 38.3, seeing the steepest rate of contraction once again.
New orders fell by the least pronounced margin since September 2025. The decline in total new business received by construction firms eased to its weakest level in ten months during July, offering an encouraging signal heading into the second half of the year. The trend in new orders is often viewed as a leading indicator for future activity levels, as project pipelines typically translate into output over subsequent months.
On the cost side, input price inflation continued to moderate, easing further from the near four-year high recorded in May. While the rate of increase in average cost burdens remained sharp, the latest rise was the slowest since February. Easing cost pressures, if sustained, could gradually improve margins for contractors who have contended with elevated material and labour expenses.
Despite these positive indicators, overall conditions in the sector remain subdued, as all key metrics continue to sit below the 50.0 no-change threshold, meaning the sector is still contracting — only at a slower pace than in prior months.
Source: Investinglive
