UK construction sector extends longest run of decline since global financial crisis, PMI shows

LONDON, March 5 (Reuters) – Activity in Britain’s construction sector contracted for the 14th month in a row in February, extending its longest downturn since the global financial crisis despite ​an improvement in business optimism, a business survey showed ‌on Thursday.

S&P Global’s UK Construction Purchasing Managers’ Index (PMI) for Britain’s construction sector fell in February to 44.5 from January’s seven-month high of 46.4.

The reading remained well below the 50-mark that divides growth from contraction, as it has since ‌the ​start of 2025, and was below a ⁠median forecast of 47.0 in ⁠a Reuters poll of economists.

A rise in business optimism – which hit its highest level in 14 months – marked a rare bright spot.

Tim Moore, economics director at S&P Global Market Intelligence, said ​February’s decline was faster than seen on average since the run of sub-50 readings started in January 2025.

“A sharper downturn ⁠in house building was the main factor ⁠behind the setback for UK construction activity in ​February, following some signs of stabilisation at the start of 2026,” Moore ​said.

Falling order books were blamed on a mix of ‌sluggish market conditions, “exceptionally wet weather”, which disrupted construction projects, and the steepest rise in cost pressures since July 2025, S&P said.

The residential building activity subindex fell for the eighth month in a row, ⁠dropping to 37.0 in February from 39.3 in January. Commercial and civil engineering activity also fell.

The weakness stands at odds with Prime Minister Keir ⁠Starmer’s government target ‌to build 1.5 million homes over its five-year ⁠parliamentary term, a rate of construction not achieved ​since ‌the 1970s.

The gloom in the construction sector – which ​accounted for more ⁠than 6% of British economic output in 2025 – contrasted with a more upbeat picture in the services PMI.

The all-sector PMI – which includes manufacturers as well – stood at 52.9 last month, slightly below January’s 53.1, which was the highest since August 2024.

(Reporting by Suban Abdulla; Editing ​by Hugh Lawson)