One glimmer of hope is increased optimism about growth prospects among buyers
Construction activity was on the slide again last month – although output growth prospects were at their highest level since December last year.
The S&P Global UK Construction Purchasing Managers Index hit 46.6 in April, marginally up from the previous month’s 46.4, but the fourth consecutive decrease.
The bellwether index said: “Rising business uncertainty led to delayed decision-making on new projects. The latest survey indicated further declines in total order books and cutbacks to staffing numbers.”
Civil engineering remained the weakest-performing area of construction activity in April with a score of 43.1, with the latest survey indicating a sharp rate of decline amid a lack of new work to replace completed projects. Commercial work, which posted a score of 45.5 decreased for the fourth month running while the pace of decline accelerated to its fastest since May 2020.
Residential work showed a degree of resilience in April, the survey said, with the rate of contraction easing to the least marked in 2025 to date with a score of 47.1.
The survey added: “Construction companies widely noted that heightened business uncertainty and worries about the broader UK economic outlook had weighed on client demand. April data indicated a steep reduction in total new work and the pace of decline was the second-fastest since May 2020.”
But buyer optimism provided a glimmer of hope with around 41% of the survey panel forecasting a rise in output, while only 18% predicted a decline.
On staffing levels, the survey warned: “Staffing numbers across the construction sector meanwhile decreased for the fourth consecutive month but the rate of job shedding eased slightly since March. Subdued demand and rising pay pressures were cited as reasons for the non-replacement of voluntary leavers.”
Aecom’s head of cost management and commercial Brain Smith said: “It’s encouraging to see that the pace of decline is slowing as we hope to see activity and order levels continue to recover through the summer.
“[But] contractors and developers are under no illusion of there being a single silver bullet to get more spades in the ground though. A cut in interest rates this month is one of a number of more longer-term factors that will support growth, while we await further progress on planning reform.”
And Kelly Boorman, national head of construction at restructuring firm RSM, said: “Despite the government’s focus on innovation, data and digital transformation, construction businesses lack the working capital to invest in technology and improve productivity. To stimulate housing activity and enhance business confidence, mortgage rate stability and buyer confidence must improve.”
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