Sep 4, 2018
U.K. Construction Growth Slows to Weakest in Three Months
(Bloomberg) -- U.K. construction growth slowed more than forecast in August, providing further evidence that the nation’s economy is losing momentum.
IHS Markit’s Purchasing Managers’ Index for the industry fell to 52.9 last month from a 14-month high of 55.8 in July, the firm said Tuesday. The reading was the lowest since May and below the 54.9 forecast by economists in a Bloomberg survey. A reading above 50 indicates expansion.
Markit’s survey showed a “sharp slowdown” in house building in August, while work on civil engineering projects decreased for the first time in five months. New business growth also ebbed, with some respondents noting Brexit-related uncertainty was holding back investment.
The pound extended a decline after the report and was 0.4 percent weaker at $1.2821 as of 9:35 a.m. in London.
The report is the latest to suggest the U.K. economy is cooling. A gauge for manufacturing showed growth unexpectedly slowed to the weakest in two years last month, just as the Bank of England opted to hike interest rates to the highest since 2009.
Markit is due to release a reading for the dominant services sector Wednesday, a week before BOE policy makers announce their next decision on Sept. 13.
(Adds chart, pound reaction in fourth paragraph.)
--With assistance from Mark Evans.
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