According to S&P Global, the UK Construction Purchasing Managers' Index (PMI) rose to 44,7 in July from 38,4 in June, its highest reading in four months, based on data collected between 9 and 30 July 2026. The index remains below the neutral 50,0 threshold that separates growth from contraction, meaning output kept falling, but at the slowest pace since March. Tim Moore, economics director at S&P Global Market Intelligence, said that "July data suggests that the performance of the UK construction sector has started to stabilise after a sharp downturn throughout the second quarter of 2026".
All three main sub-sectors recorded a slower rate of decline. Commercial activity was the most resilient at 46,8, up from 41,5 in June and the strongest commercial reading in four months. Housebuilding stood at 41,8, its mildest contraction since October 2025. Civil engineering remained the weakest category at 38,3, though this marked an improvement from a more than six-year low recorded in June. New orders fell at the least marked extent since September 2025, which S&P Global linked to signs of a turnaround in client demand and a revival in tender opportunities in some cases, despite subdued underlying market conditions.
Business activity has now declined every month since January 2025, according to the survey, the longest unbroken run of contraction since the global financial crisis. Employment fell for the 19th consecutive month, though at the slowest pace since February. Input price inflation eased to a five-month low, with the cost gauge falling to 69,8 from 77,9 in June, while supplier performance improved and subcontractor availability grew at its fastest pace since April 2025.
Business activity expectations for the year ahead improved to their most upbeat level since February, with 38% of surveyed firms predicting expansion over the next 12 months against 17% anticipating a further decline.