The construction sector extended its long period of decline in November, according to the latest purchasing managers’ index (PMI) data.
The S&P Global index registered 39.4 in the month, down from 44.1 in October. A number below 50 shows industry activity is shrinking.
November’s figure was the lowest recorded since May 2020, when almost all housebuilding stopped and many other sites were shut due to the Covid pandemic.
It is the 11th consecutive month where construction output has fallen, according to the survey. After 10 months, it became the longest period of decline since the 2008 financial crash.
However, official data supplied by the Office for National Statistics, released in August, showed that construction output grew by 1.2 per cent from April to the end of June.
S&P Global also said that new orders in November decreased to the greatest extent since May 2020.
In a statement about the figures, the firm said that many construction companies reported weak client confidence, alongside delayed spending decisions linked to uncertainty ahead of last week’s Autumn Budget.
Housing (with an activity index of 35.4), civil engineering (30.0) and commercial construction (43.8) experienced the fastest downturns in activity for five-and-a-half years, it added.
November also saw the fastest non-pandemic downturn in total new business since early 2009, with 44 per cent of survey respondents reporting a fall in new orders and only 17 per cent seeing an increase.
Employment numbers also decreased for the 11th consecutive month, due to the lack of new work to replace completed projects and wage pressures.
Aecom head of cost management Brian Smith said: “Firms could be forgiven for not displaying any festive cheer, but the government has made all the right noises by protecting capital spending and backing planning reform. However, clients need to see further progress before committing to new projects.
“The additional 350 planners announced in the chancellor’s Budget is a good example of the tangible measures that will fuel a growth in activity. But this needs to be combined with a shift in mindset, including embracing AI and digital tools to speed up how planning submissions are reviewed.
“Seeing this sort of progress in action will boost confidence among the country’s contractors in 2026.”
Atul Kariya, head of real estate and construction at accountants MHA, said the Budget offered some grounds for cautious optimism but warned: “The underlying reality remains the same: rising labour costs, ongoing planning delays, global headwinds and the potential dampening effect of a mansion tax are still weighing heavily on sentiment.
“Core construction activity continues to be slow, and with weak demand and a thin pipeline of new projects, any improvement is likely to be slow and steady.”
He added that more pressures will arise from the minimum wage increase, the Renters Reform Bill and extra taxes on private landlords.
“Our clients consistently tell us that stability, clarity and predictability in policy are essential. Construction companies, investors and lenders plan on a three- to five-year horizon, yet changes introduced in a single Budget can recalibrate the economics of a project overnight,” he said.