Editor's note: This brief was summarised by The Property AI Newsroom from a report by Mortgage Strategy. Read the original article for full details.

UK Construction Output Sees Slowest Decline in Four Months

UK construction sector output fell again in July, but at the slowest pace since March, according to the latest S&P Global UK Construction PMI. The index reached 44.7 in July, up from 38.4 in June, marking its highest level in four months, though it remained below the 50.0 threshold that separates growth from contraction.

The report highlights that supply chain performance improved and input price inflation eased to a five-month low. The sector has recorded reduced volumes of business activity since January 2025, representing the longest continuous period of decline since the global financial crisis.

All three main construction sub-sectors saw much slower rates of contraction in July. Commercial work showed the greatest resilience with an index of 46.8, while civil engineering activity experienced the steepest decline at 38.3. House building activity decreased at the least marked pace since October 2025, with an index of 41.8.

Total new business received by construction companies fell at the slowest pace for 10 months in July. Some firms noted a recent turnaround in tender opportunities, including for commercial development, residential projects, and transport infrastructure work. However, many survey respondents reported that geopolitical uncertainty and subdued domestic economic conditions continued to affect customer demand.

The data also showed a softer reduction in employment numbers across the construction sector, with the rate of job losses at its slowest since February. Subcontractor availability improved to the greatest extent since April 2025. Purchasing activity continued to decline, but at the least marked rate since September 2025.

Softer demand for construction products and materials, along with fewer transportation delays, contributed to improved supplier performance for the first time in five months. Input price inflation, while still sharp, was at its slowest since February.

Business activity expectations for the year ahead remained positive in July, with around 38% of survey respondents predicting expansion and 17% anticipating a decline.