Investing.com - U.K. construction sector activity expanded at the slowest pace in ten months in February, underlining concerns over the economy and dimming the case for higher interest rates, industry data showed on Wednesday.
In a report, market research firm Markit and the Chartered Institute of Purchasing & Supply said that their U.K. construction purchasing managers' index fell to a seasonally adjusted 54.2 last month from a reading of 55.0 in January. Economists had expected the index to inch up to 55.5 in February.
On the index, a reading above 50.0 indicates expansion, below indicates contraction.
February data highlighted a further loss of growth momentum across the UK construction sector, with output, new orders and employment all expanding at slower rates than at the start of 2016.
For the first time since January 2013, residential building was the worst performing sub-category of construction output. Moreover, the latest rise in housing activity was the slowest recorded since June 2013.
Reports from survey respondents suggested that less favourable demand conditions and greater uncertainty about the economic outlook continued to act as a brake on the construction sector.
Commenting on the report, David Noble, Group Chief Executive Officer at the Chartered Institute of Procurement& Supply, said, “The sector felt the pressure of challenging global economic conditions and softer demand growth as purchasing activity expanded at its weakest pace since April 2015.”
GBP/USD was trading at 1.3942 from around 1.3940 ahead of the release of the data, while EUR/GBP was at 0.7788 from 0.7791 earlier.
Meanwhile, European stock markets were broadly higher. London’s FTSE 100 tacked on 0.35%, the EURO STOXX 50 rose 0.35%, France's CAC 40 advanced 0.55%, while Germany's DAX inched up 0.35%.