U.K. Construction Growth Unexpectedly Jumps to Highest in a Year
(Bloomberg) -- U.K. construction growth unexpectedly accelerated to the fastest in more than a year last month as a pick-up in house building boosted activity.
IHS Markit’s Purchasing Managers’ Index for the sector climbed to 55.8 in July, the firm said Thursday. That’s up from 53.1 in June, and beats economist forecasts for a slight decline.
The report suggests the sector is picking up momentum after bad weather saw it undergo a torrid start to 2018. It may also fuel optimism about the strength of the U.K. economy on the day Bank of England policy makers are widely expected to announce their second interest-rate hike in the space of nine months.
“July data reveal an impressive turnaround in the performance,” said Tim Moore, associate director at IHS Markit “While the recent rebound in construction work has been flattered by its recovery from a low base earlier in 2018, there are also signs that underlying demand conditions have picked up this summer.”
Markit’s survey showed new orders jumped in July, while house building expanded at the sharpest pace since December 2015. Still, despite the better than expected reading, the firm also cautioned that companies remain cautious, with Brexit continuing to damp optimism.
That uncertainty was also seen in a report Wednesday showing manufacturing growth edged lower in July. A similar gauge for services, which make up the biggest part of the U.K. economy, is forecast to show a slight slowdown in expansion when it is published on Friday.
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