UK Construction PMI Falls to 39.7 on Cost Surge

UK construction activity contracted sharply in April, hitting a five-month low as soaring input costs linked to the Middle East conflict squeezed builders and eroded demand.

The S&P Global UK Construction Purchasing Managers' Index fell to 39.7 from 45.6 in March, defying economists' expectations of a modest rebound. Readings below 50 signal contraction, and the latest figure marked the weakest performance since November. Output has declined steadily since the start of 2025, with civil engineering posting the sharpest drop at 35.5, followed by residential housebuilding at 38.2 and commercial work.

Firms reported a rapid acceleration in input cost inflation, the steepest in three decades outside the post-pandemic surge of 2021-2022. The input prices index jumped to 81.4 from 70.5, its highest since June 2022 and the second-largest monthly rise since records began in 1997. Around 69 percent of respondents cited higher costs, up from 48 percent in March, primarily blaming fuel surcharges, elevated transport expenses and raw material price hikes. These pressures stemmed from the Iran war, which disrupted supply chains and blocked vessels from passing through the Strait of Hormuz,...