Mixed results in the construction PMI's in Europe
(Kitco News) - It has been a mixed bag in Europe in regards to the construction PMI's. In the UK the number for February hit 53.3 vs analyst consensus forecasts of 51.0 and German Markit construction PMI for the same month printed at a dismal 41.0 below the previous reading of 46.6.
Starting with the positives, UK construction companies experienced a solid return to growth in February after a setback at the start of 2021. The report said, New orders also regained momentum as projects start increased in anticipation of improving UK economic conditions over the course of the year. However, shipping charges and rising commodity prices all contributed to the sharpest increase in average cost burdens across the construction sector since August 2008.
In Germany, the fallout came as severe bad weather caused widespread disruption to work on sites. At the same time, building companies faced growing pressure on margins from rising input costs, stemming partly from bottlenecks in supply chains. Looking forward constructors retained a pessimistic outlook for activity over the next 12 months, citing concerns over
squeezed client budgets. That said, expectations were the least pessimistic since the start of the coronavirus disease 2019 (COVID-19) pandemic.
Later on in the session, we do not get the construction number from the US but there is a big event where Fed chair Powell is speaking. The question that many analysts have been asking is if there could be some kind of comment on the rising interest yields. The 10-year Treasury yield has recently hit 1.5% and this caused market participants to worry about financing costs and also there was some flow into the safe-haven asset.