UK Construction Sector Eases Decline: April PMI Shows Signs of Stabilisation
The UK construction industry remained under pressure in April 2025, but new data suggests the slowdown may be starting to ease. The latest Construction PMI from showed a slight improvement, with the index rising to 46.6, up from 46.4 in March. While still below the 50.0 mark that separates growth from decline, this indicates a less severe downturn.
Construction Activity Still Falling, But More Slowly
- April PMI: 46.6
- March PMI: 46.4
- Threshold for growth: 50.0
- Consecutive months of contraction: 4
Although the sector continues to contract, the pace of decline has softened, hinting that the worst may be passing.
Sector Breakdown
- Civil Engineering (43.1): Steep decline, struggling due to a lack of new work replacing completed jobs
- Residential Construction (47.1): Mild contraction, most resilient area so far in 2025
- Commercial Building (43.1): Steep decline, struggling due to a lack of new work replacing completed jobs
Housing activity remained the most stable, while civil engineering experienced the largest drop. Commercial building also weakened, with many clients adopting a wait-and-see approach.
Sharp Drop in New Orders and Purchasing Activity
April’s data also revealed ongoing fragility in future demand:
- New business orders recorded their second-sharpest drop since May 2020
- Staffing levels declined for a fourth straight month, though at a slower pace
- Purchasing activity fell at its fastest rate in nearly five years
These trends reflect low client confidence and continued caution around new project commitments.
Cost Pressures Persist Despite Softer Demand
Even with reduced deman, construction costs remained elevated. Firms reported higher prices for:
- Concrete
- Timber
- Insulation
On the positive side, fuel prices edged lower, and supplier delivery times improved for a third consecutive month, signalling some easing of supply chain pressures.
Business Confidence Shows Modest Improvement
Despite the challenges, outlook among construction firms improved:
- 41% expect output to rise over the next 12 months
- Only 18% anticipate a fall
- This is the highest level of optimism since December 2024
Confidence is especially strong in the residential building segment, which many firms see as key to recovery.
A Decade of Construction PMI Trends (2015–2025)
A review of the Construction PMI over the last ten years highlights some major shifts:
- A dramatic fall during the COVID-19 outbreak in early 2020
- A solid recovery in mid-2021
- Renewed softness in early 2025 amid economic headwinds
Although the sector is still under strain, recent data suggests the decline may be slowing – and a turning point could be on the horizon.
As we look ahead, much will depend on whether residential construction can remain a stabilising force – and whether input costs begin to ease more noticeably across the board.
Source: S&P Global