The construction sector continued to shake-off pre-election uncertainty last month. The Markit UK Construction Purchasing Managers’ index rose to 58.1 in June, from 55.9 a month earlier, and the fastest increase since February. While residential activity remained the fastest growing area of construction output, both commercial and civil engineering activity growth over the month.
Rising client confidence and improving business conditions across the UK economy helped overall growth of new work rebound for the second successive month to its steepest since October 2014. Business confidence across the UK construction sector was at its highest level since February 2004, with 62 per cent of respondents forecasting a rise in output over the next year, and just four per cent expecting a delay.
This was the most optimistic survey in terms of business confidence across the UK construction sector since February 2004, with around two thirds of respondents saying they thought output would rise over the next year, and just four per cent expecting a decline. The figure was supported by employment across the construction sector which grew at the fastest rate since December.
The Greek finance minister Yanis Varoufakis has said he will resign if the Greek people vote “yes” in Sunday’s referendum. But Varoufakis is confident the Greek people will vote “no” and not accept creditors’ demands. If he is wrong, he says the left-wing Syriza-led government will sign the agreement that was put to it last weekend.
While Greek Prime Minister Alexis Tsipras has attempted to reignite negotiations ahead of the referendum, European leaders have reiterated that they will not come back to the negotiating table until after the result. Leaders across Europe have also said the referendum is effectively a vote on Greece’s membership of the Eurozone. Varoufakis, however, has said a deal can still be reached with creditors even if the result is negative.
The U.S. labour market took one step forward and one back in June as job creation advanced while wages stagnated and the size of the labour force receded. The addition of 223,000 jobs followed a 254,000 increase in the prior month that was less than previously estimated. The jobless rate fell to a seven-year low of 5.3 percent as more people left the workforce.
The figures indicate corporate managers are keeping headcounts in line with stronger consumer demand while overseas markets remain feeble. At the same time, more moderate job gains may still be enough to reduce the unemployment rate, consistent with the Federal Reserve’s perceived timetable to raise borrowing costs by year-end.
The economy has just completed its sixth year of expansion since the recession ended in June 2009. While the job market has rebounded, faster wage growth has been slow to follow suit. Average hourly earnings at private increased just 2 percent over the 12 months ended in June, following a 2.3 percent gain the prior month. They’ve posted a 2 percent gain on average since the current expansion began.
The unemployment rate, which is derived from a separate Labour Department survey of households, fell from 5.5 percent and is the lowest since April 2008. The decrease reflected fewer Americans participating in the labour force.
The improving outlook for the labour market is among the reasons Fed policy makers have said they may begin to raise the benchmark interest rate this year from near zero. Fed Chair Janet Yellen has said she expects the central bank to raise borrowing costs this year, and that subsequent increases will be gradual without following a predictable path.
09:30 - GBP - UK Services PMI (June) expected to improve to 57.4 from
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