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UK Construction PMI beat market predictions

Tuesday, Aug 02 2016

July data signalled a further downturn in UK construction output, but the rate of contraction was only fractionally faster than that seen during the previous survey period. At the same time, new order volumes dropped at a slower pace than the three-and-a-half year low seen in June. Anecdotal evidence suggested that economic uncertainty following the EU referendum was the main factor weighing on business activity in July, especially in the commercial building sector. However, there were also reports suggesting that demand patterns had been more resilient than expected, and some firms linked new enquiries from international clients to exchange rate depreciation.

The seasonally adjusted Markit/CIPS UK Construction Purchasing Managers’ Index registered 45.9 in July, down fractionally from 46.0 in June and below the 50.0 no-change threshold for the second month running. The latest reading signalled the fastest overall decline in construction output since June 2009. This largely reflected the steepest fall in commercial building for over six-and-a-half years, alongside a drop in civil engineering activity for the first time in 2016. Residential construction also declined at a solid pace in July, but the rate of contraction eased from June’s three-and-a-half year low.

 

Sterling is currently being traded around 1.33 area. Pair is likely to find support around 1.3250 handle and resistance above 1.3380 level.

More in this category: « Number of unemployed in Spain fell by 83,993 China's Services PMI declined to 51.7 in July »

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