- UK Construction PMI Rises to 7-month High
UK construction activity expanded in June following the surge in commercial building and residential work.
Construction Purchase Managers’ Index rose to 53.1 in June, up from 52.5 in May, IHS Markit reported. The report point to the sharpest overall rise in construction output since November 2017.
New orders rebound at the fastest pace since May 2017 in the month, further validating renewed interest in the sector.
Increased new work boosted employment numbers and purchasing activity as construction companies noted that surge in purchasing activity reflected new projects starts and forward purchase of inputs to mitigate the projected rise in costs due to the trade war and economic uncertainty ahead of Brexit.
Average cost increased at the fastest pace in nine months in June. This was attributed to the increase in transportation costs and higher prices of metals — especially steel that has affected deliveries.
According to Duncan Brock, Group Director at the Chartered Institute of Procurement & Supply “Input prices were a challenge with the biggest inflationary rise since September 2017, so the pressure was on to build up stocks of materials rising in price and becoming more scarce.”
The UK economy remained resilience ahead of Brexit, according to recent data. The economy grew better than expected in the first quarter while the manufacturing report released on Wednesday showed growth sustainability at 54.4 despite growing uncertainty.
The pound gained against the US dollar from 1.3100 support retested on Monday to trade at 1.3196.