UK Construction PMI Continues Expansion 2012.04.03

April 03, 2012 23:59

The United Kingdom (UK) construction purchasing mangers index (PMI) increased 2.4 points to a seasonally adjusted 56.7 in March 2012 from the previous month, according to Markit on Tuesday. A value above 50.0 indicates expansion whereas a value below 50.0 indicates contraction. The number follows February’s index of 54.3, continues growth month-on-month ever since January 2011 and marks the strongest increase in 21 months.

The broad sectors of construction including housing, commercial and civil engineering all registered gains. As before, commercial construction proved to have the strongest activity gains. Residential construction made only a slight increase. UK companies experienced a substantial rise in new business in March. As well, the construction sector reported increased employment indicative of expansion in both output and new orders although the rate of job building was modest. In addition to this, the region’s construction companies reported optimistically about expected improvements in activity over the next year with positive sentiment increasing to a 22-month high. Construction companies indicated intentions to add additional marketing and increased opportunities for business. Despite this, optimism remained blow the historical average.

In other news, United States (US) manufacturers received $6.0 billion more orders (up 1.3%) for manufactured goods in February than the previous month to $468.4 billion, according to the US Census Bureau report on Tuesday. This followed a 1.1% decrease in January. As well, shipments increased $0.3 billion (0.1%) to $462.6 billion.

The GBPUSD failed to break above resistance after hitting 1.6050. The pair fell below 1.5900 as comments from the Fed put downward pressure on the pair. Latest reports indicate that the Fed is backing away from QE3 which is making the Dollar stronger. If the GBPUSD closes below 1.5900, we expect the pair to target 1.5800.

Eugene Ross, Analyst

Admiral Markets

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