Investing.com - U.K. construction sector activity in May unexpectedly fell with output growth easing to its weakest for almost three years and incoming new work declining for the first time since April 2013, industry data showed on Thursday.
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 51.2 from April’s reading of 52.0.
Economists had expected the index to remain at 52.0 in May.
On the index, a reading above 50.0 indicates expansion, below indicates contraction.
Markit senior economist Tim Moore noted that May signaled the worst month for commercial building since June 2013 and indicated that survey respondents said the June 23 referendum on the U.K.’s membership in the European Union had disrupted new order flows and the timing of client decision making in particular.
"Heightened uncertainty and subdued general economic conditions in turn contributed to the first outright fall in new work received by construction firms for just over three years," Moore said.
Moore did mention that the pick-up in staff hiring was the fastest since the beginning of the year which contrasted with the falling new order volumes.
“An optimistic interpretation is that construction firms are looking through the second quarter weakness,” Moore explained.
“However, should this fail to materialize later in 2016, then job creation is likely to come under pressure given its elevated trend relative to current demand patterns,” he warned.
GBP/USD was trading at 1.4439 from around 1.4421 ahead of the release of the data, while EUR/GBP was at 0.7766 from 0.7771 earlier.
Meanwhile, European stock markets were trading mixed. London’s FTSE 100 rose 0.36%, the EURO STOXX 50 gained 0.10%, France's CAC 40 slipped 0.10%, while Germany's DAX fell 0.18%.