UK January construction PMI 48.8 vs 47.3 expected

<ul><li>Prior 46.8</li></ul><p>The reading still shows a contraction but at least it is the highest since August last year. That shows some improvement in overall activity with the fall in new orders this time around being rather marginal. House building (44.2) remains the worst performing segment with marginal declines observed in civil engineering (49.2) and commercial building (49.1). A positive takeaway is that business activity expectations were the strongest since January 2022. S&amp;P Global notes that:</p><p>"UK construction companies seem increasingly
optimistic that the worst could be behind them soon
as recession risks fade and interest rate cuts appear
close on the horizon. The prospect of looser financial
conditions and an improving economic backdrop meant
that business activity expectations strengthened to the
highest for two years in January. Moreover, there were
again signs that customer demand is close to turning a
corner as total new orders fell to the smallest extent for
six months.
</p><p>"Relatively subdued pipelines of new work nonetheless
resulted in lower levels of construction output for a fifth
successive month in January. House building remained
by far the weakest-performing category, despite the
rate of decline easing to its slowest since March 2023.
</p><p>"Meanwhile, higher prices paid for imported items
contributed to a rise in overall cost burdens for the first
time since last September. However, there were still
signs of space capacity across the construction supply
chain as vendor delivery times shortened again at the
start of 2024 and sub-contractor availability increased
at a robust pace."</p>

This article was written by Justin Low at www.forexlive.com.