"January's survey provides reassurance that the U.K. construction recovery remains on track. Housing activity growth now stands at its strongest for just over a decade, boosted by growing demand for new homes and improving confidence within the U.K. property market."
- Tim Moore, senior economist at Markit
The cable is still moving in a long downside trend that started on January 29. Though, the pair managed to bounce back to 1.6344 on Tuesday on the back of stronger-than-expected fundamental data from the U.K.
Following Monday's manufacturing report that surprised markets to the downside, on Tuesday Markit company said a gauge of activity in the construction sector soared at the quickest pace since August 2007, reaching the highest level since the financial crisis. The construction PMI stood at 64.6 in January, accelerating from 62.1 a month earlier and beating analysts' forecasts for a 61.6 figure. At the same time, the pickup in homebuilding was the fastest since November 2003, the data also showed, bolstering the case of the heating housing market that can turn into another bubble. Activity in commercial construction, civil engineering and a measure of confidence all improved over the corresponding period as well. It is also important to point that construction sector pushed the U.K. economy to its best annual performance since 2007 last year.
While services PMI will be released on Wednesday, the latest data suggests the construction output advanced 4% on a quarterly basis, countering previous quarter's surprise contraction of 0.3% and pointing to a stronger GDP growth in the first three months of 2014.
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