UK construction warms up after harsh winter: PMI

LONDON: British construction activity rebounded faster than expected last month after succumbing to snow in March, but the upturn did little to alter the view of investors that the Bank of England will leave interest rates unchanged next week.
Wednesday’s IHS Markit/CIPS UK Construction Purchasing Managers’ Index (PMI) jumped to 52.5 in April from 47.0 in March. That was comfortably above the median expectation of 50.5 in a Reuters poll of economists and back above the 50 line that separates growth from contraction.
Sterling rose from near a three-and-a-half-month low against the dollar before the report.
“Whilst it is improbable that this (data) will bring a rate hike back to the table in next week’s BoE meeting, it is a pleasing development nonetheless,” said David Cheetham, a market analyst for currency brokers XTB Online Trading. Survey compiler IHS Markit said the recovery was “somewhat underwhelming” after the snowstorms dubbed “the Beast from the East” hit the sector in late February and early March. Looking at the PMI over the three months to April, smoothing out a sharp fall in March and a bounce-back last month, the survey showed construction activity was barely growing.
“(The survey) provides an indication that the construction sector has been treading water at the very best in recent months,” Tim Moore, economist at IHS Markit, said.
Construction accounts for 6 per cent of British economic output. A 3.3 per cent fall in output in the sector in the first three months of the year was largely responsible for a sharp slowdown in growth for the whole economy. — Reuters