There was a steep decline in house building activity during February, according to the latest S&P Global UK Construction PMI.

The February PMI data highlighted another fall in UK construction output, with the speed of decline accelerating considerably since the start of 2025.

At 44.6 in February, down from 48.1 in January, the headline figure on the index – a seasonally adjusted index tracking changes in total industry activity – registered below the neutral 50.0 threshold for the second month running.

The latest reading was also the lowest for nearly five years and signalled a steep decline in total construction activity.

Significantly, residential building (index at 39.3) decreased for the fifth month in a row and was the weakest-performing area of construction activity in February.

Aside from the pandemic, the rate of decline was the fastest since early-2009. Survey respondents often cited weak demand conditions, headwinds from elevated borrowing costs and a lack of new work to replace completed projects.

Commenting on the latest figures S&P Global Market Intelligence economics director Tim Moore said: “Aside from the pandemic, total industry activity decreased at the steepest pace since December 2019. This was led by considerable reductions in residential building and civil engineering work, while a degree of resilience was reported for commercial construction activity. Survey respondents widely cited a lack of new work in the house building segment, due to soft market conditions and the impact of elevated borrowing costs.

However, he said that construction companies remained optimistic overall about their growth prospects for the next 12 months, albeit less so than on average in 2024 amid increasing concerns about the broader UK economic outlook. There were also signs that rising payroll costs and purchasing prices have become a source of anxiety, with the latest increase in overall business expenses the steepest since March 2023.

MHA head of construction and real estate Atul Kariya commented: “Starmer’s announcement on housebuilding is positive news, but as today’s data shows, residential building has fallen for the fifth month in a row. While the infrastructure sector remained relatively resilient compared to residential and civil engineering, activity levels still remain below 50. More investment is required to sustain any type of recovery.”

Kariya added: “The Spring statement is an opportune time for the government to look at the UK economic environment and potentially consider some revisions to their fiscal plans. The UK must create the right environment to provide confidence to investors and construction companies.”