Figures from S&P Global Market Intelligence show a slight increase in construction activity in August, but data is still “indicative of another solid decline in overall construction output”.

The S&P Global UK Construction Purchasing Managers’ Index (PMI) reported a construction activity reading of 45.5 in August, up from 44.3 in July, which had marked the steepest drop since a score of 28.9 was recorded in May 2020.

However, despite the mild increase, the index was still well below the neutral value of 50. Readings above 50 mean activity in the industry is increasing, while anything below means it is contracting.

The index also indicated that a slower reduction in commercial building (at 47.8) helped to offset steeper declines in residential (44.2) and civil engineering activity (38.1).

Civil engineering was the weakest-performing segment in August, with business activity decreasing at the fastest pace since October 2020. This also marked the sharpest drop in housebuilding since February 2025.

Construction companies surveyed for the index noted challenging market conditions, intense price competition and headwinds from sluggish UK economic activity, as well as lower volumes of output and incoming new work leading to less staff.

Tim Moore, economics director at S&P Global Market Intelligence, said the data “signalled only a partial easing in the speed of decline after output fell at the fastest pace for over five years in July”.

He added: “Sharply reduced levels of housing and civil engineering activity were again the main reasons for a weak overall construction sector performance. Commercial work showed some resilience in August, with the downturn the least marked for three months.

“Elevated business uncertainty and worries about broader prospects for the UK economy meant that construction sector optimism weakened in August. The proportion of panel members expecting a rise in output over the year ahead was 34%, down from 37% in July and lower than at any time since December 2022.”

Gareth Belsham, director of Bloom Building Consultancy, said the figures showed “things have gone from bad to worse for housebuilders”.

He added: “The rate of decline is more modest in commercial building construction, but this one bright note can’t mask the overall slowing in the industry.

“Most worrying of all is the slowing pipeline of new work. New orders have fallen for eight months in a row, and while contractors tend to book projects months in advance, even big names are starting to see their order books thinning out.

“None of this speaks to an industry full of confidence. Just a third of the contractors interviewed for the PMI survey expect output to improve over the next year – a lower proportion than at any time since December 2022.”