After a subpar PMI figure from the manufacturing industry yesterday that slipped from four-year highs, today’s construction PMI print followed suit, missing forecasts coming out at 52.2.
While both sets of PMIs were above the crucial 50 level showing expansion in the sector, there was still doubt that stellar figures would be reached once again. Today’s figure is weighed down by the moderate downturn in commercial projects combined with stagnated expansion in the home building sector. However, investors are still forecasting an increase in construction activity throughout 2018, which fuels views that the UK economy saw an unexpected slowdown at the end of 2017 and is expected to get back on track shortly.
Tomorrow services PMI is being released, which is the largest sector in the UK and investors along with the Bank of England will be looking closely to see if this is a turning point for the UK economy and whether or not 2018 will be as prosperous as many think.The FTSE has continued to flounder on the second trading day of 2018, even though the US, Asian, and mainland European markets have pushed higher. The disappointing UK construction PMI forms the second disappointing UK PMI survey is as many days, with the pound drifting marginally lower as a result. Unfortunately, the weaker pound has done little to help the FTSE, which has been dragged lower thanks to yet another poor showing from the miners thanks to ripples in the recent gold and copper resurgence story. The UK services PMI reading is due on Thursday morning, and a third disappointing survey would provide yet another reason to sell the pound.