Forexpros – Construction sector activity in the U.K. slowed in May, with growth momentum easing further from the near-two year high seen in March, industry data showed on Wednesday.
In a report, market research firm Markit and the Chartered Institute of Purchasing & Supply said that their U.K. construction purchasing managers’ index fell by 1.4 points to a seasonally adjusted 54.4 in May from a reading of 55.8 in April.
Economists had expected the index to fall by 1.6 points to 54.2 in May.
On the index, a level above 50.0 indicates industry expansion, below indicates contraction. The index hit a 21-month high of 56.7 in March.
While the latest reading still signaled a solid overall increase in construction activity, the pace of expansion was the slowest for three months.
Moreover, the survey showed that new business growth and confidence about the 12-month outlook were both much less positive than in April.
The data showed that new business growth eased markedly in May to its weakest for four months.
Commenting on the report, chief executive officer at the CIPS David Noble said, “Reports of the U.K.’s return to recession appear to have delivered a blow to general confidence in construction, with this month’s PMI posing some big questions for the sector in the coming months.”
Following the release of that data, the pound remained higher against the U.S. dollar, with GBP/USD adding 0.6% to trade at 1.5475.
Meanwhile, European stock markets were sharply higher. London’s FTSE 100 jumped 1.45%, the EURO STOXX 50 rallied 2.2%, France’s CAC 40 surged 2%, while Germany’s DAX shot up 1.9%.
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