Credit: Investing.com -
Investing.com - U.K. construction sector activity slipped further into contraction in July though new orders decreased at a slower pace, industry data showed on Tuesday.
In a report, market research firm Markit and the Chartered Institute of Purchasing & Supply (CIPS) said that their U.K. construction purchasing managers' index fell to a seasonally adjusted 45.9 from June's reading of 46.0.
Economists had expected the index to drop to 43.8 in July.
On the index, a reading above 50.0 indicates expansion, below indicates contraction.
The data showed the fastest overall drop in output since June 2009 with all three sub-categories recording lower output, led by commercial activity.
Though the report showed that new orders fell at a slower pace than in June, the survey revealed a drop in confidence to the 12-month business outlook to its lowest since April 2013.
Markit senior economist Tim Moore noted that the current survey was the first to be compiled entirely after the U.K.'s vote to leave the European Union and confirmed "a clear loss of momentum since the second quarter of 2016, led by a steep and accelerated decline in commercial building."
"U.K. construction firms frequently cited ongoing economic uncertainty as having a material negative impact on their order books," Moore explained.
Moore signaled that there were positive points such as the fact that the decline in construction output was little-changed from June's seven-year low and some reports showed that demand patterns had been more resilient than expected given the uncertain business outlook.
"Reflecting this, new order volumes and purchasing activity both dropped at asloightly slower pace than in the previous month," Moore said.
Immediately following the report, cable strengthened on the better-than-expected read. GBP/USD was trading at 1.3215 from around 1.3197 ahead of the release of the data, while EUR/GBP was at 0.8474 from 0.8485 earlier.
Meanwhile, European stock markets were trading lower. London's FTSE 100 fell 0.84%, the Euro Stoxx 50 lost 1.59%, France's CAC 40 traded down 1.61%, while Germany's DAX shed 1.37%.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
