The UK construction sector saw its steepest downturn in output for five-and-a-half years in November, according to the latest S&P Global UK Construction PMI.
The headline index fell to 39.4, down from 44.1 in October, marking its lowest reading since May 2020 and reflecting the eleventh consecutive month of contraction.
Survey respondents pointed to fragile client confidence, delayed project decisions and uncertainty ahead of the Budget as key factors holding back activity.
All three sub-sectors recorded accelerated declines. Housing activity fell to 35.4, commercial construction dropped to 43.8 and civil engineering recorded the sharpest fall at 30.0.
Companies reported a persistent lack of incoming work, with 44% of firms citing a drop in new orders compared with just 17% reporting an increase.
Outside of the pandemic period, the seasonally adjusted New Orders Index signalled the fastest fall in new work since early 2009.
Employment numbers also continued to weaken, declining for the eleventh month in a row as firms struggled to replace completed projects and absorbed higher wage pressures.
The latest fall in staffing levels was the steepest since August 2020. Subcontractor usage fell again, extending a trend that has been ongoing since December 2024.
Softer demand for construction products helped improve supplier delivery times to their best level since June 2024, although some firms still reported shipping delays.
Buying activity fell at the fastest pace for five-and-a-half years, while input prices rose at a rate below the long-term average.
Tim Moore, economics director at S&P Global Market Intelligence, said: “November data revealed a sharp retrenchment across the UK construction sector as weak client confidence and a shortfall of new project starts again weighed on activity.
“Total industry activity decreased to the greatest extent for five-and-a-half years, led by steep falls in infrastructure and residential building work.
“Commercial construction also faced severe headwinds during November as business uncertainty in the run up to the Budget pushed clients to defer investment decisions.
“Lower workloads, alongside pressure on margins from rising wages and purchasing costs, continued to dampen staff hiring in November.
“The latest round of job cuts was the most marked since August 2020. Construction companies also signalled a slide in business activity expectations for the year ahead as hopes of an imminent rebound in sales pipelines faded in November.
“The degree of optimism dropped to its lowest since December 2022 amid reports of cutbacks to client budgets and pervasive worries about long-term UK economic growth prospects.”
Industry commentators said the figures highlight ongoing pressures in housebuilding.
Richard Pike, chief sales and marketing officer at Phoebus Software, said: “The latest housebuilding figures paint a bleak picture, with the fastest downturn in housing activity since the start of the pandemic.
“The uncertainty caused by the Budget speculation over the past few months has hit confidence hard and delayed decisions and shows the real-world impact of the Government’s prevarications.
“Underlying this however, there are some fundamental issues that the Government needs to address.
“We’re simply not building enough homes in the UK, which is driving up prices and creating affordability issues.
“While rising material costs and labour shortages are clearly factors, too many developers are land banking, watching values increase rather than getting on with development.
“I would like to see planning laws changed to make developers bound by timescales, rather than being able to sit on land and property indefinitely.”
The report shows that while 31% of construction companies expect an upturn over the next year, 25% forecast a decline, producing the weakest level of optimism since December 2022. Respondents cited the potential for improved conditions if borrowing costs fall, but concerns about long-term demand and reduced client budgets continued to weigh on expectations.
