UK construction firms suffered a steep fall in activity last month as surging costs and global instability pushed the sector into its weakest position for months, according to closely watched industry data.
The S&P Global UK construction purchasing managers’ index (PMI) dropped to 39.7 in April from 45.6 in March, signalling a marked contraction in output and the fastest deterioration since late last year.
Any reading below 50 indicates shrinking activity.
The decline reflects broad-based weakness across the sector, with civil engineering particularly affected, while both residential housebuilding and commercial construction continued to contract.
Analysts said rising energy and fuel costs — linked in part to the fallout from conflict involving Iran — were feeding through the supply chain, driving a rapid increase in purchasing prices for builders.
Firms reported suppliers were passing on higher transport and energy costs, pushing input inflation to its fastest pace since 2022.
The survey also pointed to growing caution among clients, with uncertainty surrounding the Middle East conflict prompting delays to spending decisions and fewer new projects coming to market.
Industry firms said this hesitation was compounding already fragile demand conditions, with output now falling for several consecutive months at the start of 2025.
Tim Moore, economics director at S&P Global Market Intelligence, said: “A rapid acceleration of input cost inflation was seen across the UK construction sector in April.
“Aside from the post-pandemic surge in input prices from early 2021 to mid-2022, the latest rise in purchasing costs was the steepest in three decades of data collection.
“Around two-thirds of the survey panel reported higher cost burdens in April, which was overwhelmingly linked to fuel surcharges and subsequent rises in raw material prices.
“Adding to supply chain challenges, the latest data also indicated longer wait times for the delivery of construction items due to international shipping delays.”
Atul Kariya, head of real estate and construction for accountancy firm MHA, said: “Today’s construction PMI underlines a sector still being heavily squeezed by weak demand and renewed cost inflation, with rising energy prices due to the conflict in the Middle East adding fresh pressure to an already fragile situation.
“Higher build costs, tighter viability and interest rate uncertainty are making land buying, tendering and project timing harder to judge.
“As a result, there is a growing risk that decisions will be postponed until pricing and borrowing costs stabilise.”
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