U.K. Construction PMI Pulls Back From 17-Month High In June

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by: Investing.com

U.K. construction sector activity pulled back in June from what had been a 17-month high the prior month, missing forecasts, industry data showed on Tuesday.

In a report, market research firm Markit and the Chartered Institute of Purchasing & Supply (CIPS) said that their U.K. construction purchasing managers' index fell to a seasonally adjusted 54.8 last month from May's reading of 56.0. Economists had expected the index to drop to 55.0 in June. On the index, a reading above 50.0 indicates expansion, while below indicates contraction.

The report highlighted that the pullback was due to weaker rises in new orders and employment, and that business optimism hit its lowest point so far in 2017.

IHS Markit senior economist Tim Moore further noted that was a growth slowdown due to weaker rises in commercial building and civil engineering activity, but that residential construction work continued to increase at one of the fastest rates since the end of 2015.

"Survey respondents commented on renewed caution among clients, in response to heightened political and economic uncertainty," Moore said. "While construction firms remain upbeat overall about their near-term growth prospects, the degree of confidence fell to its lowest so far this year," he added.

Moore also indicated that supply chain pressures were among the most intense since early 2015, and commented that June data showed strong input price inflation, "driven by resilient demand and upward pressure on costs imported construction materials."

Following the report, GBP/USD traded at 1.2922, compared to 1.2934 ahead of the release, while EUR/GBP was at 0.8785, compared to 0.8778 earlier.

Meanwhile, European stock markets traded mostly lower. London's FTSE 100 dropped 0.15%, the Euro Stoxx 50 lost 0.25%, France's CAC 40 traded down 0.16%, while Germany's DAX fell 0.29%.

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