- U.K. Construction PMI Beats Expectation Ahead of Brexit Talks
The U.K. construction sector expanded more than projected in November, following the surged in business confidence in the sector.
According to IHS Markit, the construction Purchasing Managers’ Index (PMI) climbed to 53.1 in November from 50.8 in October. This is the largest expansion in five months and better than the 51.0 projected by most economists.
The PMI was primarily driven by the increased in activities in the residential subsector, while commercial and civil engineering activity continued to contract. Indicating that new investment in the sector is still weak and weighed upon by the uncertainty surrounding Brexit.
Also, while confidence about business prospect over the next year climbed to a three-month high, it still remained near three-year low. This, IHS Markit said companies attributed to economic and political uncertainty due to the ongoing Brexit negotiation.
“UK construction companies experienced a solid yet uneven improvement in business conditions during November,” said IHS Markit associate director Tim Moore.
Costs of materials rise at the weakest rate since September 2016. Meaning, despite signs of easing price pressures investors are not confident enough to go all out. Hence, the weak new investment in the sector.
Prime Minister Theresa May will be meeting the European Union later on Monday to reach an agreement with the EU regarding Britain exit from the European Union.
The pound sustained gains against the US dollar for fifth consecutive weeks, rising to $1.3519 from $1.3058 recorded in October.
Again, a positive outcome from Britain and EU representative later today may further aid the Pound outlook against the US dollar, especially with the tension between US and North Korea deepening following deployment of 30 jets to South Korea on Monday.
Therefore, we could see 1.3665 levels going forward.