The downturn in the UK construction sector showed signs of easing last month, with output and new orders falling at the slowest pace since the start of the year, data from the S&P Global UK Construction Purchasing Managers’ Index reports.

The industry activity survey posted a 47.9 mark in May, up from 46.6 in April, signalling the slowest reduction in output since January. 

Lower business activity has been recorded throughout 2025 to date, “but the latest fall was only modest,” it adds. 

However, housebuilding was the weakest-performing segment at 45.1.  

“The downturn in residential construction work accelerated since April amid ongoing reports of subdued demand conditions,” the report points out. 

Civil engineering also decreased “at a solid pace” to 45.9, which extended this area’s current period of contraction to five months. Commercial work fell “marginally” to 49.5. 

However, employment numbers fell at the fastest pace for nearly five years, the survey adds, while the use of subcontractors decreased to the greatest extent since May 2020. 

The report says: “Total new work received by UK construction companies decreased to the least marked extent for four months in May.  

“Survey respondents attributed reduced order intakes to delayed decision-making among clients and cutbacks to capital spending budgets.” 

S&P Global Market Intelligence Economics Director Tim Moore says: “The construction sector continued to adjust to weaker order books in May, which led to sustained reductions in output, staff hiring and purchasing.  

“However, the worst phase of spending cutbacks may have passed as total new work fell at a much slower pace than the near five-year record in February.  

“Housing activity was the weakest-performing segment in May as demand remained constrained by elevated borrowing costs and subdued confidence.” 

Moore adds: “Rising wages, squeezed margins and subdued demand weighed on construction employment, despite a brighter outlook for business activity.  

“Job shedding was the steepest since August 2020, while subcontractor usage decreased to the greatest extent for five years.” 

Bloom Building Consultancy director Gareth Belsham points out: “Few champagne corks will be popping at two months of slowing decline. 

“But May’s modest improvement in the PMI data confirms that April’s bump was no blip. Some in the construction sector are now daring to hope that the worst is past. 

“But an increase in the number of construction workers being laid off hardly speaks to an industry preparing for boom times.”