UK Construction PMI Misses Forecasts, Extends Slowdown in May
The seasonally adjusted Markit/CIPS UK Construction Purchasing Managers’ Index (PMI) missed forecasts at 52.5 and printed at 51.2 in May, down from 52.0 in the previous month. Output growth easing to its weakest for almost three years and new order volumes saw the first decline since April 2013.
However, staff hiring was maintained in May, which marked three years of continuous job creation. The pick-up in staff hiring was the fastest since the beginning of the year which contrasted with the falling new order volumes.
UK construction firms remained upbeat overall about the year-ahead outlook, with the degree of optimism just up fractionally since April, and still at one of the lowest levels seen over the past three years.
GBP/USD was trading at 1.4439 from around 1.4421 ahead of the release, saw a slight bounce, but is retracing gains to trade largely unchanged.
“An optimistic interpretation is that construction firms are looking through the second quarter weakness and feel that workloads will recover momentum. However, should this fail to materialise later in 2016, then job creation is likely to come under pressure given its elevated trend relative to current demand patterns.” said Tim Moore, Senior Economist at Markit.