UK Construction PMI Rebounds from Multi-Year Low

The S&P Global UK Construction PMI rose to 46.4 in January 2026, rebounding from December’s five-and-a-half-year low of 40.1 and exceeding market expectations of 42.0. While this marked the strongest reading since June 2025, the index signaled a continued contraction in construction activity. House building was the weakest-performing segment, although the rate of decline eased to its slowest pace in three months. Civil engineering activity also contracted sharply, while commercial construction showed the smallest decline since May 2025, as some firms cited improved post-Budget clarity and a modest recovery in investment sentiment. Total new orders fell at the slowest rate in three months, suggesting early signs of stabilization, though employment continued to decline at a marked pace. On the cost side, input price inflation accelerated to a four-month high. Business optimism improved to its strongest level since May 2025, but confidence remained well below its long-term average.