UK construction sector decline eases but conflict hits new business

(Alliance News) - The UK construction sector remained in negative territory last month, on a drop in housing activity, though the pace of decline eased according to a survey on Wednesday.

The S&P Global construction purchasing managers' index rose to 45.6 in March from 44.5 in February. The PMI moved closer to the 50 point neutral mark, suggesting the decline in the sector abated.

"March data indicated a solid reduction in UK construction output, albeit at a slightly less marked pace than in the previous month. Residential work remained by far the weakest-performing category. The latest survey also suggested that operating margins were under considerable pressure from a rapid acceleration in input cost inflation. Construction companies widely noted that the war in the Middle East had pushed up fuel, transportation and raw material prices," S&P Global said.

"Survey respondents generally cited falling confidence among clients and a lack of new project starts. However, resilient energy sector demand was reported in March. Some firms suggested that a return to typical weather conditions helped to moderate the overall downturn in construction output after delays due to unusually wet weather in February."

Housebuilding, civil engineering and commercial construction all registered declines in March, though at a slower pace than February.

"The latest fall in civil engineering activity was the least marked since May 2025, which some firms linked to a gradual turnaround in major infrastructure work," S&P Global said.

New business fell at the fastest pace in four months, has the Middle East conflict hit confidence among construction sector clients.

S&P Global added: "March data pointed to a renewed downturn in supplier performance. Average lead times among vendors lengthened for the first time since July 2025 and to the greatest extent for 14 months. Construction companies typically commented on longer international shipping times and tighter supplies of some raw materials."

The construction PMI features a panel of 150 firms, with responses collected between March 12 and 30.

By Eric Cunha, Alliance News news editor

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