The latest S&P Global UK Construction PMI found activity was at 38.2 in May, down from 39.7 in April and well below the neutral 50.0 threshold.

The rate of contraction between these two months was the steepest since May 2020; before this, the fastest fall was recorded in March 2009.

Residential activity (with a reading of 36.0) was the weakest-performing segment, with survey respondents commenting on unfavourable market conditions and headwinds from elevated borrowing costs.

Commercial construction (39.0) also saw a steeper reduction in output levels in May, reflecting risk aversion among respondents in response to geopolitical tensions and rising inflationary pressures.

Meanwhile, civil engineering work fell at a slightly less marked rate than in April (36.2).

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Tim Moore, economics director at S&P Global Market Intelligence, attributed this weakness to a mixture of economic uncertainty and rising inflation in the wake of the Middle East war.

Higher energy, fuel and transportation costs mean input price inflation has grown at its fastest pace since June 2022.

“Fuel surcharges and rapid increases in prices for energy-intensive raw materials continued to be felt across the construction supply chain,” said Tim.

“Concerns about a prolonged decline in construction order books, alongside unfavourable near-term UK economic prospects, weighed on business optimism in May.

“This index has fallen sharply since the start of 2026, and confidence levels are now almost as low as those seen ahead of last autumn's Budget.”