Forex Pros – Britain’s construction sector activity increased more-than-expected in May, industry data showed on Thursday.
In a report, market research firm Markit and the Chartered Institute of Purchasing and Supply said that their U.K. construction purchasing managers’ index rose to a seasonally adjusted 54.0 in May from April’s reading of 53.3.
Economists had expected the index to ease up to 53.5 in May.
On the index, a level above 50.0 indicates industry expansion, below indicates contraction.
While the latest reading pointed to a stronger increase of activity in May, the index remained below the first quarter average.
A further rise in new business and the release of previously moth-balled projects supported the latest expansion in UK construction activity. Furthermore, employment was reported to have increased, albeit only modestly.
Meanwhile, panelists commented that higher raw material costs continued to be the main driver of inflation which, despite easing marginally for a second month running, remained at a historically elevated level.
Commenting on the report, chief executive officer at the CIPS David Noble said, “It&’s encouraging to see a return to growth in the housing sector after April’s blip but there may be a long way to go before underlying demand for new properties, whether purchase or rental, takes the edge off market volatility.”
Following the release of that data, the pound was up against the U.S. dollar, with GBP/USD easing up 0.02% to hit 1.6338.
Meanwhile, European stock markets were sharply lower. The FTSE 100 fell 0.95%, the EURO STOXX 50 slumped 1.05%, France’s CAC 40 tumbled 1.3%, while Germany’s DAX dropped 1.2%.
ForexPros.com
