- Tim Moore, Markit economist
Growth in the UK construction sector unexpectedly slowed in January to the weakest level in nine months following a short-lived recovery in December. The Markit/CIPS UK construction PMI fell to 55.0 from 57.8, against economists' forecast of 57.5. Housebuilding and commercial property work were the biggest drag on the headline indicator. Furthermore, optimism among construction companies fell to the lowest level since December 2014. Even though employment within the sector was sustained in January, it rose at the weakest pace for more than two years. Construction remains one of the most volatile components on the output side of the UK's gross domestic product. It was again among the downward drivers in the final quarter of 2015, when it dropped 0.1% from the third quarter. Overall Britain's economy grew 0.5% in the December quarter, up from the downwardly revised 0.4% in the preceding trimester. Services remained the biggest driver of the economy, accounting for 78% of GDP.
Investors' eyes now turn to the services PMI due Wednesday and "Super Thursday", when the Bank of England announces its policy stance and publishes the Monetary Policy Committee minutes as well as quarterly Inflation Report forecasts.
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