The data pointed to a marked decreases in volumes of work carried out across all three sub-sectors, but a considerable drag came from a fresh drop in residential building.

Posting 44.3 in July, down from 48.8 in June, the headline S&P Global UK Construction PMI (a seasonally adjusted index tracking changes in total industry activity)  indicated the sharpest contraction in over five years at the start of the third quarter.

Where a reduction in activity was reported (around 29% of the survey panel), firms mentioned site delays, lower volumes of incoming new business and weaker customer confidence.

Notably, civil engineering saw the sharpest drop during July. The headline PMI figure was also pulled lower by a renewed decline in residential building activity. As for commercial construction, a marked but softer fall was registered.

For the year ahead, surveyed companies  were optimistic of growth in activity on balance, but expectations were weak when compared with their long-run trend.

Sharp drop in residential work 

Commenting on the latest numbers, S&P Global Market Intelligence  principal economist Joe Hayes said: “Dissecting the latest contraction, we can see a fresh and sharp drop in residential building, as well as an accelerated fall in work carried out on civil engineering projects.

“Forward-looking indicators from the survey imply that UK constructors are preparing for challenging times ahead. They’re buying less materials and reducing the number of workers on the payroll.”

He added: “Anecdotally, companies reported a lack of tender opportunities and a hesitancy from customers to commit to projects. Broader themes of uncertainty, both domestically but also internationally, will do little to reignite investment appetites.”