British construction activity expanded at the slowest pace in more than a year last month, with order books filling at the slowest pace since June 2013 and optimism waning. The Markit PMI fell to 59.4 in November, its weakest reading since October last year, down from 61.4 in October.
While falling short of economists' expectations for a slight decline to 61.0, the index was comfortably above the 50 threshold for growth, as well as its long-run average of 54.5. Analysts suggested the contraction was down to weaker figures from the civil engineering sector, although house building still remained strong.
Most construction companies are still optimistic, however they noted noted that uncertainties ahead of next year's general election had weighed on business confidence and influenced client’s willingness to commit to new projects.
British households are spending less on eating out, hotels, alcohol and smoking according to the annual survey official survey of Family budgets released by the office of national statistics. The Survey revealed how rents, gas and electricity are taking a larger portion of spending. Total average spending by families in 2013 was 517.30 a week, an increase from £501 the year before but was substantially below the 2006 peak of £539.80 spent per week.
US construction spending recorded it largest gain in five months in October easing concerns of a sharp slowdown in fourth quarter economic growth. Construction spending rose 1.1 percent the biggest advance since May.
There were expectations yesterday that U.S. Federal Reserve Chair Janet Yellen would discuss or the outlook for monetary policy in welcoming remarks on Tuesday to US College Students. However Yellen made no comment on current economic conditions or the outlook for monetary policy As a result the USD was unmoved when she spoke.
The big news today is the Autumn annual statement from Chancellor of the Exchequer George Osborne where he will outline the governments spending plan for the next 12 months. We except to see some volatility in the pound during his speech to parliament. Later on in the afternoon we have the US non farm Payroll employment estimates that are expected to be slightly lower than last month so we could see some dollar weakness off the back of a lower estimate.
09:30- GBP: Markit services PMI (Nov) expected to be higher at 56.5 from 56.2
12:30- GBP: Autumn Forecast statement
12:30- USD: ADP Emplyment Change (Nov) expected to be lower to 221K from 230K
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