Britain’s construction sector stayed in contraction in August 2026 as the S&P Global UK Construction PMI eased to 44.3 from 44.7, missing expectations of 45.5 and marking a 20th straight month below the 50 growth threshold. Residential work slumped to 37.6 amid weaker client demand and lower risk sentiment linked to the Middle East war, which has lifted energy prices and borrowing costs. Civil engineering activity dropped to 40.5 and commercial construction fell to 47.8. Firms cut headcounts while input cost inflation picked up on higher transport, materials and fuel costs, though companies remained upbeat for the year ahead on expectations of new tender opportunities. Official data showed June construction output 2.3% lower than a year earlier, underscoring the challenge for Prime Minister Andy Burnham’s social housing plans. Separately, the all-sector PMI rose to a six-month high of 51.8.