Investing.com - U.K. construction sector activity expanded at the slowest pace in nine months in January, underlining concerns over the economy and dimming the case for higher interest rates, industry data showed on Tuesday.
In a report, market research firm Markit and the Chartered Institute of Purchasing & Supply said that their U.K. construction purchasing managers' index fell to a seasonally adjusted 55.0 last month from a reading of 57.8 in December. Economists had expected the index to decline to 57.5 in January.
On the index, a reading above 50.0 indicates expansion, below indicates contraction.
A number of survey respondents noted that softer new business growth had acted as a brake on output growth and staff hiring at the start of 2016.
Civil engineering was again the weakest performing area of activity overall, despite rebounding slightly from December’s eight-month low.
Mirroring the trend for business activity, latest data signalled a slowdown in new order growth at the start of 2016. The latest increase in incoming new work was the slowest for four months.
Survey respondents cited greater caution among clients and less favourable underlying demand conditions.
Commenting on the report, Tim Moore, senior economist at Markit and author the report, said, “U.K. construction firms struggled for momentum at the start of this year, with heightened economic uncertainty acting as a brake on new orders and contributing to one of the weakest rises in output levels since the summer of 2013.”
GBP/USD fell to 1.4331 from around 1.4364 ahead of the release of the data, while EUR/GBP was at 0.7614 from 0.7600 earlier.
Meanwhile, European stock markets were broadly lower. London’s FTSE 100 dropped 0.1%, the EURO STOXX 50 shed 0.35%, France's CAC 40 declined 0.4%, while Germany's DAX slumped 0.55%.