Housebuilding was the only area of the construction industry to grow in June, as output in the sector fell for the sixth month in a row.
Work on new homes came in at a mark of 50.7, according to the latest S&P Global UK Construction PMI index. A mark above 50 indicates expansion.
It says: “Higher levels of residential activity were recorded for the first time since September 2024, although the rate of growth was only marginal.
“Some firms commented on an upturn in new projects and sales pipelines.”
But overall, construction output posted a 48.8 mark in June, from 47.9 a month ago, as firms “indicated a marginal reduction in total business activity”.
However, the report adds: “New orders decreased at an accelerated pace. This contributed to the weakest degree of business optimism across the construction sector for two-and-a-half years.”
Among other parts of the industry, commercial work decreased at the fastest pace since May 2020, coming in at 45.1.
Civil engineering fell for the sixth month running and was the weakest-performing area of construction activity, posting a 44.2 mark.
S&P Global Market Intelligence economics director Tim Moore says: “Higher levels of residential work were recorded for the first time since September 2024 amid some reports of more stable demand conditions.”
But he added that conditions across the wider industry remained bleak.
“Survey respondents widely cited fewer tender opportunities, rising competition for new work and a projected headwind from subdued business investment during the year ahead,” Moore points out.
Bloom Building Consultancy director Gareth Belsham adds: “The real cause for alarm is the continued decline in new orders – as they are the key to where the industry goes from here.
“Builders’ order books have got progressively thinner every single month in 2025 so far, and this is taking a severe toll on construction industry sentiment.”
