Investing.com - UK construction sector activity unexpectedly dropped in August, hitting a one-year low and dampening optimism over the British economy, industry data showed on Monday.
In a report, market research firm IHS Markit and the Chartered Institute of Purchasing & Supply (CIPS) said that their UK construction purchasing managers' index fell to a seasonally adjusted 51.1 last month from July’s reading of 51.9.
Economists had expected the index to inch up to 52.0 in August.
On the index, a reading above 50.0 indicates expansion, below indicates contraction.
IHS Markit highlighted that a robust rise in house building was offset by a marked fall in commercial work and noted that new business declined for the second month running.
“UK construction companies indicated that lackluster growth conditions persisted during August,” IHS Markit associate director Tim Moore commented in the report, noting that commercial development was particularly hard hit as business activity fell at the fastest pace since July 2016.
“There were signs that UK construction firms are bracing for the soft patch to continue into this autumn, with fragile business confidence contributing to weaker trends for job creation and input buying during August,” Moore concluded.
Following the report, GBP/USD traded at 1.2942 compared to 1.2945 ahead of the release, EUR/GBP was at 0.9205 compared to 0.9192 earlier, while GBP/JPY traded at 141.69 compared to 141.71 previously.
Meanwhile, European stock markets traded mostly lower. London’s FTSE 100 dropped 0.18%, the Euro Stoxx 50 lost 0.47%, France's CAC 40 traded down 0.44%, while Germany's DAX retreated 0.47%.