UK construction PMI reaches it highest level since September 2014 but the German number slightly dissapoints
(Kitco News) - Construction PMI's in UK and Germany improve. U.K. Construction PMI (Mar) 61.7 vs expected 54.6. German IHS Markit Construction PMI (Mar) 47.5 vs previous 41.0.
The main theme of the data is the fact that there seems to be supply constraints around the world. This must have been exacerbated by the Suez Canal blockage and we will need to give it a couple of weeks to see if things eased up.
The U.K. number expanded at its sharpest pace since September 2014 and job creation moved to a 27 month high, great news for the U.K. economy. House building, commercial work and civil engineering are the main growth sectors but this all points to a good situation in the base metals complex. It was reported that client demand for new projects was good and this is encouraging as it may have been unclear what the corporate financial position could have been after the COVID-19 pandemic.
In Germany, the weather was a bit of a problem. The nation has not dealt with the 3rd wave of the coronavirus as well as the U.K. as hospitalizations are edging up again. Angela Merkel is initiating another lockdown in the nation and this could lead to a lagging effect in normalization compared to some of the other developed economies. Lastly, the report highlighted an issue with inflationary pressures as many of the surveyed companies reported a rise in costs. The good news is that constructors showed more optimism over the next 13 months.
Later in the session, we will get the latest ECB minutes and then the initial jobless claims for the U.S. but the main event could be comments from Fed Chair Powell. The meeting minutes from the last Fed meeting failed to inspire any volatility lets see if today could be any different.