Warnings about ‘difficult winter’ to come as PMI index slumps again and approaches two years of being in the red

Output went into reverse last month as the ongoing housing slump continued to put the brakes on any recovery, a bellwether index has said.

The S&P Global UK Construction Purchasing Managers’ Index had jumped to 46.1 in September sparking hopes a corner had been turned.

But the figure fell back to 43.6 in October with housing remaining stuck in the doldrums with a score of 35.1 – the lowest reading since December last year – prompting warnings that conditions are not likely to improve over the coming months in the wake of a lacklustre Budget and the government’s Your First Home initiative not starting until April next year.

Aecom’s head of cost management Brian Smith admitted the numbers were bleak: “A faster decline in activity shows that there’s little to buoy the sector. Firms are contending with high levels of inflation, expected hikes in interest rates and a relatively stagnant economy. You get the sense that the sector will have to weather a difficult winter.”

Civil engineering (45.9) decreased in October although the pace of contraction was the slowest since May 2025. Commercial activity (46.3) also showed some resilience, although the latest reading eased from September’s 16-month high.

S&P’s economics director Tim Moore said: “Construction companies commented on severe headwinds in the house building sector from rising borrowing costs, weak consumer confidence and elevated economic uncertainty.”

But he said prospects for data centre projects and the energy and utilities sectors were more encouraging.

October’s 43.6 figure was still below the key no change score of 50 and the 22^nd successive month of output staying in the red.

Paul Atkinson, restructuring advisory partner at FRP, said: “There’s a growing disconnect between the opportunities ahead for construction and the conditions contractors are facing today. The UK has a substantial pipeline of infrastructure investment, but with project starts and contract awards struggling to gather momentum, many businesses are still waiting for that work to translate into meaningful activity.”

Meanwhile, Joe Sullivan, partner at MHA, added: “A pipeline is not work on site. The real test is whether new orders strengthen and projects move through planning, funding and procurement onto site. Until that happens, any improvements in the headline PMI over the months to come should be treated as a modest stabilisation after nearly two years of contraction rather than a meaningful recovery.”