UK construction output slides in April amid growing cost pressures

(Sharecast News) - Construction output in the UK saw its steepest decline in April since November 2025 as the Middle East conflict drove up input prices, according to a survey released on Thursday.

The S&P Global construction purchasing managers' index fell to 39.7 from 45.6 in March. This was below the 50.0 mark that separates contraction from expansion again and marked the weakest reading for five months.

Civil engineering activity saw the steepest decline, followed by house building. Commercial work showed some resilience in comparison to elsewhere in the construction sector, although the latest reduction was the fastest recorded so far in 2026.

Survey respondents pointed to subdued demand conditions and a subsequent lack of new work to replace completed projects in April. This was signalled by the sharpest decline in total new business since November 2025.

Construction companies said elevated business uncertainty due to the Iran war had led to longer sales conversion times and fewer tender opportunities.

The survey also revealed the fastest overall rate of cost inflation since June 2022.

Tim Moore, economics director at S&P Global Market Intelligence, said: "A rapid acceleration of input cost inflation was seen across the UK construction sector in April. Aside from the post-pandemic surge in input prices from early-2021 to mid-2022, the latest rise in purchasing costs was the steepest in three decades of data collection.

"Around two-thirds of the survey panel reported higher cost burdens in April, which was overwhelmingly linked to fuel surcharges and subsequent rises in raw material prices. Adding to supply chain challenges, the latest data also indicated longer wait times for the delivery of construction items due to international shipping delays.

"April data again signalled subdued underlying demand conditions, despite construction companies reporting pockets of growth in areas such as energy infrastructure work. A lack of new orders to replace completed projects contributed to the sharpest decline in business activity for five months."

Moore said expectations for construction activity over the next 12 months remained positive overall but confidence levels were the lowest since last November.

"Survey respondents cited a growing list of factors weighing on construction sector optimism, including fragile investment sentiment and elevated borrowing costs, alongside continued uncertainty about the impact of the Middle East conflict on prices, supply chains and broader economic prospects," he said.