Data on UK construction PMI registered 52.6 in August which was in line with economist expectations. This was a decline from the July reading of 53.5. A reading above 50.0 indicates industry expansion, below indicates contraction. So the fact that the index remains above 50 is a positive since it still shows activity in the construction sector and suggests that unlike previous quarters, construction will not be making a substantial contribution or contraction to UK GDP growth during Q3.
Sterling was little changed against the dollar after the data since investors are on the sidelines waiting for the U.S non farm payroll data later today.
Meanwhile EU Producer Price index as released today.
According to Eurostat, in July 2011 compared with June 2011, the industrial producer price index rose by 0.5 percent in the euro area for the 17 euro member economies compared to 0.6 percent rise by economist expectations. June was stable with zero change.
On a year on year calculation, in July 2011 compared with July 2010, industrial producer prices gained 6.1 percent in the euro area versus 5.9 percent..
The euro only briefly dipped after the news against the dollar.