February data highlighted a further loss of growth momentum across the UK construction sector, with output, new orders and employment all expanding at slower rates than at the start of 2016. The headline seasonally adjusted Markit/CIPS UK Construction Purchasing Managers’ Index registered 54.2 in February, down from 55.0 in January and the lowest since April 2015. Increase to 55.5 was forecasted.
Although still above the 50.0 value that separates expansion from contraction, the latest reading pointed to one of the weakest rises in construction output seen over the past two-and-a-half years. For the first time since January 2013, residential building was the worst performing sub-category of construction output. Moreover, the latest rise in housing activity was the slowest recorded since June 2013.
Sterling is currently being traded few points above 1.3930 level. Pair is likely to find support around 1.3850 handle and resistance above 1.40 level. Later today, in the US session, ADP job figures are scheduled for a release.