UK Construction Growth Weakest In 3 Months

Gladys Abbott
January 6, 2019

This was higher than the 50.4 recorded in November when it hit a 28-month low, and above the 50.7 reading economists were expecting.

The dollar index, which measures the greenback against six major peers, increased 0.71 percent at 96.8145 in late trading.

Construction firms noted a disappointing end to 2018 with business activity growth slowing down, according to the closely-followed IHS Markit/ CIPS Purchasing Managers' Index (PMI) figures.

Base metals fell for the most part as LME aluminium slumped 3.16%, zinc and lead dipped over 2%, copper lost 0.67%, while nickel increased 1.69%, and tin nudged up.

The latest numbers from British manufacturers are in stark contrast to numerous world's top economies, which posted a contraction last month.

As expected, after the official PMI already contracted last week, today the privately measured Caixin China General Manufacturing PMI started 2019 dipping down to 49.7 or just a fraction below 50 that marks the border line between expansion and contraction.

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IHS Markit said that the USA manufacturing PMI slipped to 53.8 in December from an initial reading of 53.9, and down from 55.3 in November. The seasonally adjusted Output Index has now dropped in three of the past four months, with the latest reading signalling the weakest rate of expansion since December 2016.

Annual house price growth in the United Kingdom also slowed to its weakest pace since February 2013 in December, with prices falling 0.7% in the final month of the year, according to Nationwide's house price index.

Chris Williamson, chief business economist at IHS Markit, said that the US service sector's growth may continue to moderate in coming months.

IHS Markit, the financial data company that compiled the survey, said "heightened political uncertainty" over Brexit had forced companies to delay spending decisions, causing a slowdown in commercial development projects.

China's central bank said on Wednesday it will adjust the calculation of some banks' reserve ratios, a move aimed at boosting the impact of a previous easing step as the economy slows. An earlier version incorrectly said manufacturing PMI fell to 54.4 in December.

Output charges also rose at the slowest pace since December 2017 as demand softened and input price growth moderated. The level of positive sentiment was the least confident for a year amid concerns surrounding the longevity of new order growth. The rate of job creation accelerated to a three-month high amid reports of shortages in capacity following a further increase in workloads.

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