U.K. construction output seems to have recovered modestly in August

Construction in the U.K. is expected to have rebounded modestly in August. Even if the construction PMI has rebounded in August to 49.2 along with services and manufacturing PMIs, it continues to remain lower than the 50 level of expanding output. However, the correlation between the official construction data and the PMI is not quite high and thus it should not be assumed that the official data would be weak, noted Societe Generale in a research report.

In July, the construction output came in flat. According to the details, housing and maintenance & repair both continued to decline a bit in July; however, certain gains are anticipated from the better mood in August. In all, construction output is expected to have increased 1 percent in sequential terms in August, added Societe Generale.