Daily Economic Outlook: 4th August 2015

It is a relatively quiet day for data with the July construction PMI the only release of note in the UK. While this rose sharply in June, it is still below its level in Q1 and even further below the average for 2014. This relatively poor performance is also reflected in the official construction data, which shows that construction output has so far made no contribution to GDP growth in 2015, says Lloyds Bank. The weakening of the PMI series in the first half of the year reflects a slowdown in both housing and commercial activity. Last month's rebound was led by the commercial sector but recent signs of  life in the housing market, with transactions rising,  point to a likely rise in construction in that sector.  

The June PPI will provide a further update on inflation pressures in the euro area. However, as this data is released more than a month after the CPI for the same month it usually has little market impact. The data is expected to show a further slippage in annual inflation in June, expects Lloyds Bank. 

US June factory orders should be up sharply. However, much of the improvement compared to June reflects a rebound in the volatile air transport sector. Already released data, show that a rebound in that area  led to a 3.4% rise in durable goods orders in June after a 2.1% fall  in May. Of more interest is what is happening to "core" orders, which are forecast to rise modestly for the third consecutive month, adds Lloyds Bank.