The construction sector activity in the UK contracted further last month, the latest survey report from Markit Economics showed this Friday.
The final Purchasing Managers’ Index (PMI) came in at 44.4 in December, down sharply from 45.3 recorded in November while missing the consensus estimates pointing to a reading of 45.9.
Key Points:
Sharpest fall in civil engineering activity since March 2009.
New business decreases for the ninth month in a row.
Input cost inflation eases to its lowest since February 2010.
Tim Moore, Economics Associate Director at IHS Markit, noted:
“December data suggested that the UK construction sector limped through the final quarter of 2019, with output falling in all three major categories of work. Brexit uncertainty and spending delays ahead of the General Election were once again the most commonly cited factors highlighted by firms experiencing a drop in construction activity.
“Civil engineering saw its sharpest decline for more than ten years and remained the worst-performing area of construction work, followed by commercial development. House building has been the most resilient category in recent months, but still declined overall during December.”
FX Implications:
The selling interest in GBP/USD gathered pace after the UK Construction PMI surprised markets to the downside last month. At the press time, the cable prints fresh three-day lows of 1.3078, mainly weighed down by broad US dollar strength amid escalation Mid-East tensions.
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