Sliding Slowing But Shedding Shooting

• Browse By Section
• News
• Sliding Slowing But Shedding Shooting

We’ve seen the slowest decline in UK construction output for four months – but it is still in decline, says the latest S&P Global UK Construction Purchasing Managers’ Index – and we’ve seen job shedding shooting up.

The downturn in the UK construction sector showed no signs of easing in May – despite optimism in the industry of a slow-throttle reversal. However, output and new orders both fell at the slowest pace since January, while growth projections for the year  ahead improved again.

Tim Moore, the economics director at S&P Global Market Intelligence, says: “House building was the weakest-performing segment in May. Moreover, the downturn in residential construction work accelerated since April amid ongoing reports of subdued demand conditions.

“Civil engineering also decreased, while commercial work fell only marginally. Total new work received by UK construction companies decreased to the least marked extent for four months.”

Survey respondents attributed reduced order intakes to delayed decision-making among clients and cutbacks to capital spending budgets.

Jobs

May data also indicated that construction firms remained reluctant to backfill vacancies amid a lack of new work to replace completed projects and pressure on margins from rising payroll costs. Employment numbers fell at the fastest pace for nearly five years. Subcontractor usage decreased to the greatest extent since May 2020.   

Purchasing activity was reduced in response to lower workloads. Input buying has now fallen for six months running.  This resulted in fewer pressures on supplier capacity and a subsequent improvement in delivery times during May.

Confidence

Moore adds: "Output growth expectations across the UK construction sector recovered to the highest so far in 2025. Survey respondents mostly cited a general improvement in sales projections as well as a potential tailwind from falling interest rates over the year ahead. 

“However, many firms noted that suppliers continued to pass through  greater payroll costs and so rising wages, squeezed margins and subdued demand weighed on construction employment, despite a brighter outlook for some."

Picture: Construction is in a slower decline but job losses continue.

Article written by Cathryn Ellis
18th June 2025

Share

Related Articles