The survey posted a 46.4 mark in March, up from a 57-month low of 44.6 in February but still “well below” the neutral 50 threshold.  

Residential construction activity declined at a slower pace than in February, but the respective seasonally adjusted index was still “well inside negative territory,” at 44.7. 

Firms commented on “weak [residential] demand conditions, although some suggested that easing borrowing costs had helped to support confidence”. 

Civil engineering, at 38.8, was the weakest-performing area of activity in March, the S&P Global UK Construction Purchasing Managers’ Index shows.

While commercial building, at 47.4, fell only moderately in March. 

The survey adds: “Combined with a drop in new orders, this contributed to the fastest reduction in employment numbers for nearly four-and a-half years.” 

The data will be a disappointment to the government, which is committed to building 1.5 million homes and 150 major projects over the next five years. 

Shawbrook managing director of development finance Terry Woodley says: “Spring showers have dampened construction sector activity, following the slow start to 2025.  

“This is likely due to wider concerns surrounding the UK economy which has discouraged developers from pursuing new projects until sentiment improves.  

“However, the Office for Budget Responsibility’s recent prediction that housebuilding will reach a 40-year high is a sign that better things are hopefully coming.” 

S&P Global Market Intelligence economics director Tim Moore adds: “The downturn in residential construction activity nonetheless eased since February, providing a source of encouragement despite ongoing reports of sluggish demand conditions.  

“Construction companies remained cautious about their year ahead growth prospects, as fewer sales conversions and a third successive monthly reduction in total new work hit confidence levels.  

“Overall business optimism slipped to its lowest since October 2023.”