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The downturn in UK construction has also eased, and optimism among firms improved – more good news for Andy Burnham’s government, after the service sector’s return to growth in July.
The headline index from S&P Global’s monthly survey jumped to 44.7 in July, up from 34.4 in June, but still below the 50 mark that divides contraction from growth.
New business received by construction companies fell at the slowest pace for 10 months in July. Some firms talked of a recent turnaround in tender opportunities, including for commercial development, residential projects and transport infrastructure work, and confidence levels are now the highest since February.
However, many also said that heightened geopolitical uncertainty and sluggish domestic economic conditions continued to weigh on customer demand.
The rate of job losses was the slowest since February.
Much slower rates of contraction were seen in all three main sub-sectors in July. Commercial work (index at 46.8) showed the greatest resilience, while civil engineering activity again saw the steepest pace of decline, at 38.3. Meanwhile, house building activity fell at the slowest pace since October, with the index at 41.8.
Tim Moore , economics director at S&P Global Market Intelligence, said:
double quotation mark July data suggests that the performance of UK construction sector has started to stabilise after a sharp downturn throughout the second quarter of 2026. Business activity levels continued to decline in all three main categories, but in each case the rate of contraction was much slower than in June. This was supported by the weakest reduction in new business intakes since September 2025.
A renewed improvement in supplier performance and softer input cost inflation were also positive developments in July. Construction companies widely commented on fuel surcharges and higher raw material prices due to the war in the Middle East, but the overall rate of cost inflation was the lowest for five months.
Source: The Guardian. Summary reproduced for informational purposes.
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