- David Noble, Group CEO at the Chartered Institute of Procurement & Supply
The UK construction sector picked up slightly in August, the latest PMI reading for the given sector showed on Wednesday. The gauge came in 57.3 points, missing the median estimate of 57.5. However, construction PMI still stayed firmly above the contraction line and higher than July's print of 57.1 points. The largest upward pressure on the monthly growth came from a sharp rebound in private housing projects, which was accompanied by massive demand for new houses. Growth of commercial work also accelerated in the eight month of the year, reaching its strongest since March. Moreover, the latest credit data published by the Bank of England revealed the number of mortgage approvals had increased in July to their highest level since February 2014.
Meanwhile, lower oil-related prices contributed to the weakest rate of input cost inflation since April. Looking ahead, market participants will now be closely watching the services PMI release due on Thursday. The sector activity is expected to rise to 57.7 points, up from 57.4 in the previous month. Overall, the UK economy should stride forward rather confidently, pushed by a robust services sector output and domestic consumption. A secured and reformed banking sector, as well as easy monetary policy, adds to the stability outlook.
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