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Figure Heloc 
Prior 40.1That’s a modest uptick in UK construction activity, with this being the slowest reduction in seven months. All three sub-sectors recorded
weaker rates of contraction than those seen in December,
helped by a more stable demand environment and reports of a
gradual turnaround in sales pipelines.House building (39.3) was the weakest-performing segment to start the year while civil engineering (40.6) also decreased at a sharp pace in
January. Meanwhile, the contraction in commercial work (48.4) was the slowest since May last year at least.S&P Global notes that:”January data provided encouraging signs that the UK
construction sector has exited its tailspin, and firms are
becoming more hopeful that new projects will get back on
track in 2026.
“The latest reduction in total industry activity was the
slowest since last June. Commercial work outperformed,
with activity moving close to stabilisation amid a postBudget boost to contract awards. House building
weakness persisted, although even here the rate of
decline eased considerably since December and was the
least marked for three months.
“Construction companies noted subdued underlying
demand due to fragile client confidence and elevated
risk aversion, but there were some reports of improving
investment sentiment and greater sales enquiries
at the start of the year. As a result, business activity
expectations rebounded to an eight-month high, while the
pace of job losses moderated.
“Supply conditions improved again in January. Lead
times for the delivery of construction items shortened for
the sixth month in a row and subcontractor availability
increased at a solid pace. However, margins were under
pressure as higher wages and raw material prices led to
the sharpest rise in purchasing costs since September
2025.”
This article was written by Justin Low at investinglive.com.
💡 DMK Insight
UK construction activity is showing signs of life, and here’s why that matters: a modest uptick in the index to 40.1 indicates a slowing contraction, which could signal a broader economic recovery. The construction sector’s performance is crucial for traders, especially those in related markets like commodities and real estate. A more stable demand environment and improved sales pipelines suggest that we might see increased investment and spending in the coming months. This could lead to a rise in demand for materials, impacting prices in the commodities market. Keep an eye on the housing sector, which remains a weak point at 39.3; any further improvement here could provide a significant boost to overall economic sentiment. However, it’s worth noting that while this uptick is positive, the sector is still in contraction territory. Traders should remain cautious and monitor for any signs of reversal or sustained growth. Watch for upcoming economic indicators and reports that could either reinforce or challenge this trend, particularly in the next monthly readings.
📮 Takeaway
Watch for further improvements in UK construction data; a sustained rise above 40 could signal a broader economic recovery, impacting related markets.
