Britain's construction sector remains under pressure in June, with activity contracting sharply but showing a slight improvement from May's six-year low. The latest survey points to weaker declines in commercial building and new orders, even as house building, civil engineering and employment continue to fall.
Highlights
- UK Construction PMI rises to 38.4 in June from 38.2 in May, still signaling sharp sector contraction well below the 50 threshold.
- House building suffers its sharpest 2026 decline, while civil engineering activity drops at the fastest rate since April 2020 due to delayed projects.
- Employment in construction falls for an 18th consecutive month, but input costs drop and subcontractor availability improves at the fastest rate since April 2025.
June PMI data signals slower contraction
As reported by Reuters, citing S&P Global, the UK Construction Purchasing Managers' Index rises to 38.4 in June from 38.2 in May. The reading remains well below the 50 threshold that separates growth from contraction, indicating the sector is still shrinking at a sharp pace.Commercial activity improves from May's level, although it remains among the weakest readings since the pandemic. The new orders index also climbs to a three-month high, signalling that demand is still declining but at a slower rate.
Tim Moore, economics director at S&P Global Market Intelligence, says some respondents point to recent contract awards and expectations of better overall market conditions as reasons for improved optimism.
Housing, infrastructure and jobs stay weak
House building records its sharpest decline of 2026 so far, underscoring continued weakness in the residential segment. Civil engineering posts its steepest fall since April 2020, amid reports of delayed infrastructure work and fewer public sector tenders.Employment declines for an 18th consecutive month, showing that firms are still cutting labour despite slightly better order trends. At the same time, subcontractor availability improves at the fastest pace since April 2025, while cost pressures ease as the input prices index falls from May's near four-year high.
Our earlier article on the Global Combat Air Programme (GCAP) covered Britain, Italy and Japan awarding a £4.6 billion development contract to the Edgewing venture to advance a sixth-generation stealth fighter targeted for 2035. It noted that the deal followed the UK’s renewed multi-year funding commitment and highlighted how shifting defence alliances and rising procurement budgets could attract additional partners and support longer-term demand across the UK defence supply chain.
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