UK construction shrinks for 20th month as housebuilding drags PMI down

UK construction activity contracted for a 20th straight month in August, with the S&P Global UK Construction Purchasing Managers’ Index falling to 44.3 from 44.7 in July and remaining well below the 50 mark for growth. The weakness was driven mainly by residential housebuilding, which saw a sharper deterioration than other parts of the sector, even as commercial and civil engineering readings improved modestly. Firms reported reduced new order intakes and cited subdued demand, low client confidence, and uncertainty linked to the Middle East conflict as key headwinds, alongside delayed client decisions. Builders cut or slowed job losses, while input price inflation cooled, suggesting some easing in cost pressures despite continued demand strain. Sentiment about the year ahead stayed positive overall but weakened from the prior month, with fewer firms expecting expansion and more still forecasting downturns. At the same time, broader private-sector activity rose, highlighting a split where the wider economy appears steadier even as construction remains under pressure.