There was another piece of disappointing UK data to add to the pile yesterday when reports showed that in September construction activity contracted for a second consecutive month.
Although the Markit/CIPS construction purchasing managers index (PMI) did register improvement, rising to 49.5 from 49.0, it still hovers below the 50 mark which divides contraction from growth.
This increase was also slightly less than predicted by economists and comes at a time when business morale lingers close to the lowest levels experienced since the British recession began way back in 2008.
This result will no doubt be a disappointment to the government who have taken decisive measures to bolster the sector. As well as 40 billion pounds of infrastructure guarantees and measures to lower household and business borrowing costs backed by the Bank of England, last month saw the announcement of 10 billion pounds of loan guarantees for the building of rented accommodation.
According to the Markit survey the civil engineering sector performed well with firms’ still hiring steadily and sturdy growth being recorded overall. However, this solid result wasn’t enough to make up for the significant drop in house building, which declined at the most rapid pace seen for two years. Commercial activity also fell by the biggest margin since the beginning of 2010.
A senior economist with Markit commented: ‘The principle takeout from Septembers PMI survey is that underlying construction weakness is likely to continue for the remainder of 2012. The current stretch of falling new orders is now the longest seen for three years.’ Tim Moore added; ‘a lack of new projects meant that confidence […] remains close to its lowest since the UK economy nosedived into recession during 2008.’
Positive stuff…
The Pound to Euro exchange rate is currently trading at 1.2475
The Pound to US Dollar exchange rate is currently trading at 1.6100
The Pound to Australian Dollar exchange rate is currently trading at 1.5764
The Euro to US Dollar exchange rate is currently trading at 1.2904
The Euro to Pound exchange rate is currently trading at 0.8013
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