UK Construction PMI fell to 51.2

Thursday, Jun 02 2016

UK construction firms experienced another difficult month overall in May, with output growth easing to its weakest for almost three years and incoming new work declining for the first time since April 2013. Survey respondents noted a general slowdown in market conditions and delays to client decision making ahead of the EU referendum. However, there were signs that construction companies remain relatively upbeat about the growth outlook, with more than half of the survey panel (51%) expecting a rise in output over the next 12 months and only one-in-seven (14%) anticipating a fall. As a result, job creation picked up in May and reached a four-month high.

The seasonally adjusted Markit/CIPS UK Construction Purchasing Managers’ Index posted 51.2 in May, down from 52.0 in April and only slightly above the critical 50.0 no-change mark. The latest reading signalled the weakest overall rise in business activity for almost three years. All three broad areas of construction activity were stuck in a low gear during May. Residential building work increased at one of the weakest rates seen since early-2013, while growth of commercial activity was the slowest for nearly three years. Civil engineering stagnated in May, which made it the worst performing sub-category of activity for the second month running.

Sterling is currently being traded few points above 1.4450 level. Pair is likely to find support around 1.44 handle and resistance above 1.4520 level. Later today, in the US session, ADP job figures and Unemployment Claims are scheduled for a release.

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