The latest Construction Sector Purchasing Managers’ Index report for August suggests activity fell “only marginally” last month from record decline in July. In addition, employment rose for the first time in the year to date.
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“The downturn in United Kingdom construction activity has eased considerably since July, primarily helped by a much slower decline in commercial building”, said Markit senior economist Tim Moore in a the report.
Markit’s final PMI reading for manufacturing activity across the eurozone was 51.7 for August, down from July’s result of 52.0.
Markit, which compiled the PMI said, companies had reported restarting work which they had put on hold in July, as their clients saw business starting to return to normal.
The slump in sterling to 31-year lows following the European Union referendum result made British products cheaper, boosting export orders to a 26-month high, with increased demand from the US, Europe, China, South East Asia, the Middle East and Norway.
A PMI reading above 50 reflects expansion of business activity; a figure below that level indicates contraction.
Higher consumption in August, along with an expected increase over the next few months, is likely to bolster GDP growth in the next quarter, analysts said.
On the price front, the survey data highlighted softer increases in input costs and output charges and, in both cases, inflation rates were below their respective trends, Lima said. “It is too early to say whether the rebounds in growth and inflation will be sustained, but the upturn in August suggests that the weaker exchange rate and recent policy action have helped to avert a downturn”.
Manufacturing growth in the eurozone slowed in August according to the latest surveys of the region’s businesses.
While manufacturing in six of the eight economies covered by the survey expanded, with Germany and the Netherlands leading the way, the overall index was dragged lower by a continued downturn in France and Italy’s first contraction since January past year.
Zhao Qinghe, senior statistician at the NBS, said that the data indicates recovery in production and demand as well as a further optimized economic structure. Rates of expansion slowed for production, new orders and new export business, resulting in weaker job creation.
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Prices increased but at a slower pace, with the price index falling for the second consecutive month in August on sharp decreases in fuel prices and the rand which, until recently, was firmer against major currencies.
