UK Construction PMI for June 2025: Signs of Stabilization Amid Challenges
UK Construction PMI for June 2025: Signs of Stabilization Amid Challenges
The S&P Global UK Construction Purchasing Managers’ Index (PMI) for May 2025, released today, June 5, 2025, paints a cautiously optimistic picture for the UK construction sector. The PMI reached 47.9, reflecting a slight improvement from April’s 46.6, signaling a slower pace of contraction in the industry. While the sector remains below the 50.0 threshold that indicates growth, this uptick suggests early signs of stabilization, particularly in residential construction, despite ongoing challenges such as high costs and weak demand.
The report, published this morning at 08:30 UTC, highlights a mixed performance across construction subsectors. Residential construction, a critical focus for the UK government’s housing targets, showed resilience with a PMI sub-index of 47.1, the highest this year. This indicates a slower decline in housebuilding activity compared to previous months. Commercial construction, with a PMI of 49.5, also saw a moderated downturn, suggesting cautious optimism among businesses. However, civil engineering remained the weakest performer at 45.9, marking five consecutive months of decline due to reduced new orders and project delays.
Employment trends raised concerns, with job cuts occurring at the fastest rate since August 2020, driven by high wage costs and reluctance to fill vacancies amid subdued demand. Despite this, survey respondents expressed growing confidence in future output, citing expectations of falling interest rates and improved sales projections over the coming year. Input costs, while still elevated, rose at the slowest pace in four months, offering some relief to firms grappling with inflationary pressures.
The data, compiled from responses by over 170 UK construction firms, underscores the sector’s sensitivity to economic uncertainties, including delayed client decisions and cautious capital spending. As the UK navigates a complex economic landscape, today’s PMI release suggests the construction industry is at a crossroads, balancing tentative recovery signals with persistent structural challenges. Stakeholders will closely monitor upcoming policy developments and interest rate decisions to gauge the sector’s trajectory in the second half of 2025.
