UK Construction PMI plunges to 8.2 in April, a big miss, GBP/USD at multi-day lows

The construction sector activity in the UK plunged to the weakest on record last month amid coronavirus crisis, the latest survey report from Markit Economics showed this Wednesday.

The final Purchasing Managers' Index (PMI) came in at 8.2 in April, up from 39.3 recorded in March and missing the consensus estimates pointing to a reading of 22.0 by a big margin.

Key points

Around 86% of the survey panel report a drop in activity since March.

Rapid falls in all main areas of construction activity.

New orders slump as clients freeze spending plans.

Tim Moore, Economics Associate Director at IHS Markit, noted

“The rapid plunge in UK construction output during April stands out even in a month of record low PMI data for the manufacturing and service sectors. Widespread site closures and business shutdowns across the supply chain meant that vast swathes of the construction sector halted all activity in response to the COVID-19 pandemic.”

"Around 86% of survey respondents reported a fall in business activity since March, while only 3% signalled an expansion. House building and commercial work were unsurprisingly the hardest hit, but civil engineering activity also fell at by far the fastest pace since the survey began in April 1997.”

FX implications

The selling pressure in GBP/USD accelerated following the worst on record UK Construction PMI data that knocked-off the pound deeper into the red. At the press time, the cable trades at fresh eight-day lows of 1.2359, down 0.60% on the day.