Construction sector's bumpy ride should trouble us all: Greg Wright

Finally, like the first swallow of spring, the cranes gradually re-appeared in the hearts of cities like Leeds, Sheffield and Hull as the business world dusted itself down from the biggest economic shock in decades.

Today, work continues at pace across a host of residential and commercial schemes, but we cannot assume that big players in the construction world won’t be affected by global economic headwinds.

We should all be alarmed by the fact that activity in the UK construction sector declined for the fourth consecutive month in April. The latest S&P Global construction purchasing managers’ index (PMI) showed a reading of 46.6 for last month, improving slightly from 46.4 in March.

Any reading above the 50 threshold indicates that activity in the industry is increasing while anything below means it is shrinking.

The latest figure meant that the sector contracted further but saw its rate of decline slow down slightly compared with the previous month. It was, however, above the 46 reading predicted by economists.

Firms reported that there was a “hesitancy” among potential clients to commit to new work amid wider uncertainty across the global economy.

Tim Moore, economics director at S&P Global Market Intelligence, said: “UK construction companies have endured a bumpy ride since the start of the year as domestic economic headwinds and hesitancy among clients led to a lack of new work to replace completed contracts. Output levels continued to slide in April, but the rate of decline eased to its slowest for three months. This was helped by slower reductions in residential building work and civil engineering activity.”

Residential construction work saw activity decline again, but with a reading of 47.1 delivered its strongest performance so far in 2025.

Meanwhile, the civil engineering sector reported a 43.1 reading due to “a lack of new work to replace completed projects”.

Atul Kariya, head of construction and real estate at MHA, said that while the economic landscape has not fundamentally shifted, the slight uptick in construction PMI in April was to be expected as the warmer weather in Spring provided a boost for the sector.

He added: “Despite the minimal rise, there is little reason for celebration as PMI still remains below the 50 threshold, suggesting that there is some way to go before the industry sees a significant return to activity.

“All three subsectors continued to decline, although the residential sector saw a less steep contraction than since the beginning of the year. As we progress through the year, we may see an increase in PMI activity as interest rates start to fall..however, this rise is likely to be short-lived.”

It’s an inconvenient truth that many construction industry bosses will be having sleepless nights as they contend with tax increases and the uncertainty for investors caused by tariffs.

Greg Wright is the deputy business editor of The Yorkshire Post