Construction industry shrinks further as business uncertainty grows

Activity in the UK construction sector declined for the fourth consecutive month in April as firms were knocked by rising economic uncertainty, according to new figures.

The latest S&P Global construction purchasing managers’ index (PMI) showed a reading of 46.6 for last month, improving slightly from 46.4 in March.

Any reading above the 50 threshold indicates that activity in the industry is increasing while anything below means it is shrinking.

Decline

The latest figure meant that the sector shrank further but saw its rate of decline slow down slightly compared with the previous month.

It was above the 46 reading predicted by economists.

Firms reported that there was a hesitancy among potential clients to commit to new work amid wider uncertainty across the global economy.

Tim Moore, economics director at S&P Global Market Intelligence, said: “UK construction companies have endured a bumpy ride since the start of the year as domestic economic headwinds and hesitancy among clients led to a lack of new work to replace completed contracts.

“Output levels continued to slide in April, but the rate of decline eased to its slowest for three months.

“This was helped by slower reductions in residential building work and civil engineering activity.”

Residential 

Residential construction work saw activity decline again, but with a reading of 47.1 delivered its strongest performance so far in 2025.

Meanwhile, the civil engineering sector reported a 43.1 reading due to “a lack of new work to replace completed projects”.

Commercial work saw its recent slowdown accelerate, with activity dropping at its fastest rate since May 2020 last month.