UK construction PMI surprises negatively in Aug, at yearly lows

The construction sector activity in the UK economy extended its downbeat momentum in August and surprised markets to the downside, a fresh report from Markit Economics showed on Monday.

The final Purchasing Managers' Index (PMI) in the UK dropped sharply to 51.1 points in August, after having booked 51.9 points in July. Markets had predicted a 52.0 reading.

Key Points:

Marginal increase in overall construction activity

Robust rise in house building offset by marked fall in commercial work

New business declines for the second month running

Tim Moore, Senior Economist at IHS Markit and author of the Markit/CIPS Construction PMI®, noted: "UK construction companies indicated that lackluster growth conditions persisted during August. Civil engineering work stagnated, which meant that the construction sector was reliant upon greater house building activity to deliver an outright expansion in output volumes. Commercial development remained by far the worst performing category, with business activity falling at the fastest pace since July 2016.”