Construction takes another hit
The roller coaster of economic data continued today with the Construction Purchasing Managers’ Index. Yesterday’s Manufacturing PMI was very encouraging, showing record growth and strong employment performance, but the Construction figures are rather disappointing. The overall Index fell below 50, indicating that output in the sector fell in December. Markit commented that this was probably due to the weather, but they also added that employment fell “sharply” and confidence about future prospects was “relatively weak.”
These results have a wider significance because last year’s recovery depended heavily on strong growth in construction. Markit’s summary of the views of the managers they surveyed was that they were reasonably optimistic about economic prospects but
the degree of positive sentiment remained relatively subdued, as concerns over cuts in public spending persisted.
The results led to a drop in sterling, though they were hardly a surprise. The key figures will be tommorrow’s service sector PMI, as this represents over half the economy.