Today we start on a brighter note than yesterday with the UK construction sector offering some welcome respite from the recent barrage of gloomy data. The construction PMI released yesterday came in at 54, signalling a pick in the expansion rate from the previous month’s 53.3, where anything above 50 signals growth.
As with any UK economic release, positive news can be contrasted with some negative sentiment and today is no different! On analysis of the different components that make up the UK construction PMI it shows that the civil engineering sector, which includes roads, bridges, railways etc, actually shrunk last month with government spending cuts talking its toll.
On a more positive note commercial building maintained its stable growth while house building expanded after contracting in April. However, it must be pointed out that mortgage approvals fell to a record low in April and if demand for housing remains weak it is difficult to envisage how it’s possible for house building to continuing growing.
Keep a close eye on the release of the crucial UK services PMI release today. The service sector makes up three quarters of the UK economy and is forecast to have increased to 55.5 from the previous month’s 54.3. Expect increasing volatility in Sterling the further the actual figure deviates from expectation.
Other major news from yesterday was the almost monthly occurrence of Greece’s credit rating being cut, with it now having the lowest credit rating in any of the credit worthy European nations, having falling behind Montenegro. Representative of the ECB, EU and IMF are currently in Athens with a decision on whether the country will receive more funding expected by the end of today.
In markets overnight the pound was relatively unchanged against the dollar at 1.6305 with markets awaiting the release of the all important US nonfarm payrolls, which will provide further evidence on the health or otherwise of the US economy. The pound was also relatively unchanged against the euro at 1.1250 with attention focussed on the Greek bailout talks.
Posted in Daily Market News on May 30 2014
Hopes for an economic revival took a major setback yesterday as activity in the manufacturing sector slumped to levels last seen during the recession, mortgage approvals crashed to a record low for April and Britain was officially declared one of the gloomiest nations in the world.VIEW FULL ARTICLE
Posted in Daily Market News on Jun 2 2011 by alex