Investing.com - U.K. construction sector activity lost momentum in January, falling more than expected, industry data showed on Wednesday.
In a report, market research firm Markit and the Chartered Institute of Purchasing & Supply (CIPS) said that their U.K. construction purchasing managers' index dropped to a seasonally adjusted 52.2 last month from December’s reading of 54.2.
Economists had expected the index to slip to 53.8 in January.
On the index, a reading above 50.0 indicates expansion, below indicates contraction.
Markit noted that January saw the weakest activity growth since the recovery began in September 2016, although job creation hit an eight-month peak.
The research firm further indicated that the survey showed the strongest input cost inflation since August 2008.
“UK construction firms experienced a subdued start to 2017, with all the key categories of activity losing momentum,” Markit senior economist Tim Moore commented in the report.
Moore also highlighted the inflationary impact on the construction sector from the weak pound.
“Purchasing costs increased at the strongest rate for almost eight-and-a-half years, as suppliers sought to pass on higher prices for commodities and imported construction materials,” he explained.
Immediately following the report, GBP/USD traded at 1.2700 compared to 1.2698 ahead of the release, EUR/GBP was at 0.8510 from 0.8515 earlier, while GBP/JPY traded at 142.90 compared to 142.90 previously.
Meanwhile, European stock markets traded mostly lower. London’s FTSE 100 dropped 0.17%, the Euro Stoxx 50 lost 0.31%, France's CAC 40 slipped 0.07%, while Germany's DAX fell 0.39%.