It was a ray of light in an otherwise gloomy set of statistics in the latest bellwether S&P Global UK Construction Purchasing Managers’ Index which registered 40.1 in December, up from 39.4 in November but below the neutral 50.0 value for the twelfth successive month.

UK construction companies experienced another sharp downturn in business activity and incoming new work at the end of 2025.

But rates of contraction eased from the five-and- a-half year records seen in November while the improvement in business activity expectations hit the highest
level since July.

Around 37% of the survey panel predict a rise in output levels during the year ahead, compared to 20% that forecast a decline.

Tim Moore, Economics Director at S&P Global Market Intelligence, said: “Total new orders decreased to a much lesser degree than in November, while business activity expectations for the year ahead rebounded to a five- month high.

“Some survey respondents attributed greater optimism to projections of rising infrastructure spending, especially in the utilities sector. There were also hopes
that lower borrowing costs and easing inflationary pressures could boost demand across the construction sector.”

Brian Smith, head of cost management at AECOM said: “As today’s figures show, things are starting to improve for contractors and January will all be about positioning themselves to gradually expand capacity and be on the front foot to win new work when it comes.

“Everything points towards a further slowdown in inflation and cuts in interest rates to match this year, which will embolden clients and developers to kickstart schemes left on the back burner.”