UK Construction Sector Downturn Slows in March Amid Fall in Residential Work, New Orders

Britain's construction industry remained in a downturn in March, albeit at a "slightly less marked" pace, with a fall in residential work and new orders amid higher fuel, transportation, and raw material prices due to the Middle East war.The S&P Global UK Construction PMI rose to 45.6 from the prior month's 44.5, against the Investing.com consensus estimate of 43.6. Despite the improvement, the latest reading remains below the 50 neutral threshold for the 15th consecutive month, according to S&P Global's business survey data published Wednesday.The commercial, civil engineering and house building segments all saw declines in activity levels, although at a softer rate compared with February 2026. Housing activity fell at a faster pace than the other two segments, while the drop in civil engineering activity was the least pronounced since May 2025 as some companies reported a gradual turnaround in infrastructure work, particularly in the energy sector.Total new business across the sector also dropped in March 2026 due to lower new work volumes as global economic uncertainty stemming from the war weighed on client confidence. The rate of decline marked the quickest for four months.Meanwhile, the delivery times of suppliers deteriorated as vendors' average lead time lengthened for the first time since July 2025 due to international shipping delays."March data suggested a challenging near-term outlook for construction activity as total new orders decreased at one of the sharpest rates seen over the past six years. Survey respondents commented on fragile consumer confidence and delayed investment decisions in response to the outbreak of war in the Middle East," said Tim Moore, economics director at S&P Global Market Intelligence. "Moreover, fuel surcharges and rising transport costs contributed to a surge in input cost inflation to its highest for more than three years. The month-on-month acceleration in cost inflation since February was the largest recorded in nearly three decades of data collection."Looking ahead, business activity expectations for 2026 remained upbeat overall but optimism among companies fell to a three-month low, clouded by concerns related to inflation outlook, increased borrowing costs, and a possible prolonged war.

-- Britain's construction industry remained in a downturn in March, albeit at a "slightly less marked" pace, with a fall in residential work and new orders amid higher fuel, transportation, and raw material prices due to the Middle East war.

The S&P Global UK Construction PMI rose to 45.6 from the prior month's 44.5, against the Investing.com consensus estimate of 43.6. Despite the improvement, the latest reading remains below the 50 neutral threshold for the 15th consecutive month, according to S&P Global's business survey data published Wednesday.

The commercial, civil engineering and house building segments all saw declines in activity levels, although at a softer rate compared with February 2026. Housing activity fell at a faster pace than the other two segments, while the drop in civil engineering activity was the least pronounced since May 2025 as some companies reported a gradual turnaround in infrastructure work, particularly in the energy sector.

Total new business across the sector also dropped in March 2026 due to lower new work volumes as global economic uncertainty stemming from the war weighed on client confidence. The rate of decline marked the quickest for four months.

Meanwhile, the delivery times of suppliers deteriorated as vendors' average lead time lengthened for the first time since July 2025 due to international shipping delays.

"March data suggested a challenging near-term outlook for construction activity as total new orders decreased at one of the sharpest rates seen over the past six years. Survey respondents commented on fragile consumer confidence and delayed investment decisions in response to the outbreak of war in the Middle East," said Tim Moore, economics director at S&P Global Market Intelligence. "Moreover, fuel surcharges and rising transport costs contributed to a surge in input cost inflation to its highest for more than three years. The month-on-month acceleration in cost inflation since February was the largest recorded in nearly three decades of data collection."

Looking ahead, business activity expectations for 2026 remained upbeat overall but optimism among companies fell to a three-month low, clouded by concerns related to inflation outlook, increased borrowing costs, and a possible prolonged war.