The S&P Global UK Construction Purchasing Managers’ Index fell to 44.1 in October, down from 46.2 in September
The October 2025 construction PMI marks the 10th consecutive month of decline, and the longest period of decline since 2008-09. October also saw the fastest fall of overall activity since May 2020.
Civil Engineering was the weakest sector
Civil Engineering clocked in at 35.4, making it the weakest sector and the sector that saw the sharpest drop since May 2020.
Housing saw the steepest drop in eight months, down to 43.6, while Commercial saw a much more controlled drop to 46.3.
New work fell again, with fewer tenders and project delays plaguing demand, and loss of jobs also accelerated to the steepest drop since August 2020. Confidence from political and economic uncertainty, including waiting for the budget this month, saw large drops in client spending.
Tim Moore, economics director at S&P Global Market Intelligence, said: “UK construction companies reported another challenging month in October as the prolonged weakening of order books so far in 2025 resulted in the fastest decline in business activity for over five years. Civil engineering and residential activity saw the fastest rates of contraction, while commercial building showed some resilience.
“Reduced workloads were again widely attributed to risk aversion and delayed decision-making among clients, which contributed to a slower-than-expected release of new projects. Subdued demand in the wake of heightened political and economic uncertainty also led to the steepest drop in input buying since May 2020.
“Meanwhile, some positive signals for the construction sector in October included a slowdown in cost inflation to its lowest for one year, rising subcontractor availability, and a sustained improvement in supplier performance.
“Looking ahead, business activity expectations for the coming 12 months remained much weaker than the long-run survey average, largely due to worries about fragile investment sentiment and weak sales pipelines. However, overall optimism levels edged up to the highest since July as the prospect of lower borrowing costs reportedly helped to boost demand projections.”
The latest PMI release can be found here.
The industry wants the Autumn Budget to promote growth
After the chancellor’s pre-Budget speech earlier this month, the Royal Institution of Chartered Surveyors (RICS) has published a list of recommendations to the Treasury to support the industry.
The recommendations include:
1. Transforming Business Rates
RICS supports property-based taxation but calls for a comprehensive reform of the business rates system to ensure fairness and competitiveness. The UK currently has one of the highest levels of property taxation globally, placing domestic businesses at a significant disadvantage.
- RICS therefore recommends:
Reducing the overall burden of business rates, shortening valuation gaps, and simplifying the system. - Modernising administration through improved government digital services and efficient data collection.
- Strengthening the Valuation Office Agency’s resourcing and promoting professionalism in the business rates sector by addressing ‘rogue agents’ and encouraging engagement with regulated professionals.
- Introducing targeted incentives within the business rates framework to encourage sustainable investment and support the transition to net zero.
2. Supporting High Streets and Local Economies
A fairer and more transparent business rates system must promote investment across all commercial uses and regions.
- RICS recommends:
Allowing councils to retain a greater share of local business rates revenue to fund reinvestment and regeneration initiatives, aligning with the English Devolution and Community Empowerment Bill. - Providing incentives for mixed-use conversions, such as time-limited rate reliefs and targeted tax incentives to transform vacant or underused commercial premises into productive spaces that revitalise local economies.
3. Unlocking a Green Economy
The transition to net zero represents both an environmental imperative and a major economic opportunity. However, uncertainty around Minimum Energy Efficiency Standards (MEES) and inconsistent retrofit quality continue to deter investment.
- RICS calls for:
Clarity and certainty on energy performance regulations, confirming EPC C targets for residential and EPC B for non-domestic properties by 2030. - Financial support packages to help property owners meet MEES requirements.
- Professionalised retrofit practices, ensuring consumers and public funds are protected through qualified, evidence-based advice from RICS-regulated practitioners.
- Robust monitoring and compliance mechanisms to build confidence in green schemes and ensure quality outcomes.
4. Planning Reform to Generate Growth
Planning reform must deliver both efficiency and fairness.
- RICS recommends:
Mandating adoption of the RICS Professional Standard on Compulsory Purchase across all acquiring authorities to enhance transparency, reduce disputes, and cut costs. - Embedding structured mediation within the planning process, particularly for Section 106 negotiations, through Alternative Dispute Resolution (ADR) to improve outcomes and speed up delivery.
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