Investing.com - U.K. construction sector activity expanded in line with market expectations in October, underlining optimism over the health of the economy, industry data showed on Tuesday.
In a report, market research firm Markit and the Chartered Institute of Purchasing & Supply said that their U.K. construction purchasing managers' index declined to a seasonally adjusted 58.8 last month from a reading of 59.9 in September. Economists had expected the index to fall to 58.8 in October.
On the index, a reading above 50.0 indicates expansion, below indicates contraction.
Commercial building work was a key growth driver in October, as housing and civil engineering activity both expanded at slower rates than in September.
Relatively subdued cost inflation continued in October, helped by falling raw material prices, especially metals.
Looking ahead, construction companies remain highly upbeat about their prospects for growth over the next 12 months.
Commenting on the report, Tim Moore, senior economist at Markit and author the report, said, “Rather than acting as a drag on the economy, as suggested by recent GDP estimates, the sector is continuing to act as an important driving force behind the ongoing U.K. economic upturn."
GBP/USD was trading at 1.5413 from around 1.5420 ahead of the release of the data, while EUR/GBP was at 0.7129 from 0.7126 earlier.
Meanwhile, European stock markets were modestly lower. London’s FTSE 100 shed 0.1%, the EURO STOXX 50 lost 0.1%, France's CAC 40 dipped 0.1%, while Germany's DAX inched down 0.2%.