British construction activity rises more than expected in February despite higher costs

Note: This section contains information in English only.
Source: Dukascopy Bank SA
"For listed contractors, the reporting season revealed that firms are in generally good health. In this sense, the years since the recession – with more focused strategies, increasingly disciplined approaches to contract bidding and improving margins – appear to be paying off." - Max Jones, Lloyds Bank 

UK construction activity rose slightly in February amid the strengthening civil engineering sector; however, surging costs and a drop in new orders pointed to a mixed outlook, a private survey revealed on Thursday. Markit reported its Purchasing Managers' Index for the country's construction sector climbed to 52.5 in December, following the previous month's 52.2 points and surpassing analysts' expectations for an unchanged reading.  However, the housebuilding output rate rose at its slowest pace in six months, while companies in the commercial sector reported the first decline in business activity since October. Nevertheless, these losses were offset by gains in the civil engineering sector as well as improving employment. The survey also showed that the effects of the weaker British Pound put upward pressures on materials and goods prices. Therefore, analysts' expectations of a rebound in construction activity in 2017 started to fade. Moreover, uncertainties surrounding Britain's economic outlook continued to put downward pressure on business confidence. Though, February's report showed that construction firms remained optimistic about expansion prospects, whereas only 13% of respondents said they expected to see a decline in business activity.
© Dukascopy Bank SA

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