UK construction PMI unexpectedly drops to 43.3 in Sept - GBP/USD keeps the red

Dhwani Mehta FXStreet

The construction sector activity in the UK continued to deteriorate last month, the latest survey report from Markit Economics showed this Wednesday.

The final Purchasing Managers' Index (PMI) came in at 43.3 in September, down sharply from 45.0 recorded in August and missed the consensus estimates pointing to a reading of 45.0.

Key Points:

Commercial activity remains weakest-performing category.

Second-quickest fall in new orders for over a decade.

Employment cut to greatest extent since December 2010.

Joe Hayes, Economist at IHS Markit, which compiles the survey, noted:

“The UK construction sector remained mired in a downturn at the end of the third quarter, according to the latest PMI data. Activity is being pulled down at its second-fastest clip for over a decade as firms are buffeted by client hesitancy, heightened Brexit uncertainty and a weak outlook for the UK economy.

The commercial sector was a notable casualty in September, with building activity here falling at the fastest rate since April 2009, highlighting the damaging effects of project delays and belt-tightening.”

FX Implications

The recovery in the Cable lost leg once again near 1.2280 region following the release of downbeat UK Construction PMI data, as the rates shed about 15-pips to trade near 1.2265 region.

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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