Investing.com - U.K. construction sector activity unexpectedly increased in November, though cost inflation was the strongest in five-and-a-half years, industry data showed on Friday.
In a report, market research firm Markit and the Chartered Institute of Purchasing & Supply (CIPS) said that their U.K. construction purchasing managers' index inched up to a seasonally adjusted 52.8 last month from October’s reading of 52.6.
Economists had expected the index to slip to 52.2 in November.
On the index, a reading above 50.0 indicates expansion, below indicates contraction.
The report showed that business activity rose at the fastest since March and commercial work picked up for the first time in six months.
Markit also indicated that thesuppliers continued to pass on higher imported raw material costs.
Markit senior economist Tim Moore also warned that subdued investor sentiment meant that optimism towards the year-ahead outlook remained close to its lowest since early 2013.
“Input cost inflation accelerated to its fastest for five-and-a-half years, driven by sharply rising imported raw material prices,” Moore commented.
“A number of firms cited uncertainty related to supplier price hikes as an emerging threat to the construction sector, with survey respondents commenting on difficulties forecasting project costs against a backdrop of rapidly changing inflationary pressures,” he said.
Immediately following the report, GBP/USD was trading at 1.2606 from around 1.2616 ahead of the release of the data, EUR/GBP was at 0.8436 from 0.8450 earlier, while GBP/JPY traded at 143.24 compared to 143.42 previously.
Meanwhile, European stock markets were trading lower. London’s FTSE 100 fell 0.90%, the Euro Stoxx 50 lost 1.00%, France's CAC 40 traded down 1.23%, while Germany's DAX shed 0.93%.