"Construction growth has started to moderate from the rapid pace seen over the winter, but strong rises in new work and payroll numbers provide ample optimism that output will expand strongly over the course of 2014"
- Tim Moore, senior economist at Markit
Last month construction and manufacturing sectors sent mixed signals and added some concerns about the sustainability of economic recovery. This month we saw the similar situation, as following Thursday upbeat manufacturing data, activity in the construction sector slowed to the six-month low. The cable dropped to 1.6873 and a couple of minutes later, the pair refreshed May's low and touched 1.6865. Earlier we mentioned that as long as the pair fluctuates above 1.68-mark, the outlook is still bullish. This suggestion is still in place, as despite disappointing construction PMI, the gauge remained still above the threshold level.
A report from Markit showed a gauge of activity in the construction sector slowed to 60.8 in April following 62.5 a month earlier. Economists had expected a slowdown, even though the consensus forecast stood for 62.2 reading. The sector accounts only for some 6.3% of the total economic output, hence, market reaction was muted. A measure of new orders advanced to 60.8 from March's reading of 58.4. Despite the disappointing data, the prospects look healthy across constructions sectors. Improved economic activity and stronger confidence are underpinning a pickup in commercial construction activity. Infrastructure is kicking in as well. Moreover, we should not forget about a solid rise in the housing market, which was one of the main drivers behind recent growth.
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