**UK Construction Sector Experiences Continued Contraction in June**
The UK construction sector faced another significant contraction in June, although the decline showed signs of easing compared to the previous month’s six-year low. According to the latest survey conducted by S&P Global, the S&P Global UK Construction Purchasing Managers’ Index (PMI) increased slightly to 38.4 in June from 38.2 in May. A PMI reading below 50 indicates a contraction in the sector, while a reading above 50 signifies growth.
Tim Moore, the economics director at S&P Global Market Intelligence, noted that some respondents to the survey expressed a degree of optimism, citing recent new contract awards and an anticipated improvement in broader market conditions as factors contributing to this sentiment. Despite the slight uptick in the PMI, the overall picture remains concerning, particularly in key areas of construction.
The commercial activity index showed improvement; however, it still registered among the weakest levels since the onset of the pandemic. This suggests that while there may be some recovery in commercial building projects, the sector as a whole is still grappling with challenges.
In stark contrast, house building experienced its most significant decline of 2026 thus far. This downturn reflects ongoing issues within the housing market, which have been exacerbated by economic uncertainties and rising costs. Additionally, civil engineering faced its steepest drop since April 2020, driven by reports of delayed infrastructure projects and a reduction in public sector tenders.
The new orders index did rise to a three-month high, indicating that while demand is still declining, the pace of this decline is slowing. This could suggest that there may be a potential stabilization in the market, albeit at a low level.
Employment within the construction sector continued to decline, marking the 18th consecutive month of job losses. However, on a more positive note, the availability of subcontractors improved at the fastest rate since April 2025, which may provide some relief to firms struggling to find skilled labor.
Cost pressures within the sector also showed signs of easing, with the input prices index falling from May’s near four-year high. This reduction in costs could help alleviate some financial strain on construction firms, potentially allowing them to navigate the current downturn more effectively.
In summary, while the UK construction sector showed a slight improvement in June compared to May, it remains in a contraction phase. The challenges of declining house building, civil engineering setbacks, and ongoing employment losses continue to pose significant hurdles for the industry. However, the rise in new orders and easing cost pressures may offer a glimmer of hope for recovery in the months ahead.