UK construction shrinks for a 22nd month as housing starts fall 29% from last year

S&P Global's survey of about 150 construction firms showed activity falling at the fastest pace since June. Housing, at 35.1, was the weakest segment and hit its lowest reading since December 2025. Civil engineering (45.9) shrank at its slowest pace since May 2025, and commercial work came in at 46.3. New orders fell at the sharpest rate since June. Almost half the panel, 48%, reported higher input costs, up from 25% in September, citing fuel surcharges, energy, aggregates, concrete, electrical items and steel.

Glenigan's index tracks projects worth £100 million or less, seasonally adjusted. Starts in the three months to October fell 9% from the previous three months. Private housing was 28% below a year earlier and social housing 31%. Health starts were down 34% on the year, industrial 44% and hotels and leisure 37%. Offices, up about a fifth, and retail, up 17%, were the only building sectors ahead of last year.

Civil engineering was the one sector up, 19% on the year, helped by the start of the £45 million Brecks Solar Farm in Nottinghamshire. Utilities starts rose 70% on the year, which Glenigan calls "the data centre effect", while other infrastructure stayed 14% lower. S&P's Tim Moore also reported strong demand for data centre projects and rising energy and utilities workloads.

Only 34% of PMI respondents expect output to rise over the next year, against 27% who expect a fall, the weakest net reading since May. Glenigan economic director Allan Wilen said the budget, delivered at the very end of the index period, could steady conditions if it eases borrowing costs and gets the announced first-time buyer scheme running quickly.