UK construction activity contracted at a sharper pace in February, with S&P Global's purchasing managers' index falling to 44.5, down from January's seven-month high of 46.4. This marked the 14th consecutive month of contraction, defying economists' expectations of a rise to 47. Housebuilding remained the weakest sub-sector, contracting faster than commercial construction and civil engineering. Its PMI score dropped to 37 from 39.3.

Labour's ambitious target of delivering 1.5 million new homes before the next election now faces significant hurdles. The slowdown reflects persistent challenges including weak demand, delayed project starts, and adverse weather conditions. While some stabilization signs emerged in business optimism, the survey predates recent geopolitical tensions that could further strain the UK economy.

Cost inflation continued to pressure margins, with raw material prices rising at the sharpest pace since July 2025. The results temper hopes of an imminent recovery, underscoring the sector's prolonged struggles despite temporary stabilization signals.