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| UK construction growth hits three-year low as 'Brexit fog' hurts confidence - business live | UK construction growth hits three-year low as 'Brexit fog' hurts confidence - business live |
| (35 minutes later) | |
| 1.26pm BST | |
| 13:26 | |
| The poor ADP jobs data adds to the feeling the US Federal Reserve may not be in a rush to raise interest rates but the report is worrying for the US economy, says David Morrison, senior market strategist at Spreadco. He said: | |
| The US dollar fell sharply in the immediate aftermath of the release as poor jobs data reduces the likelihood of a rate hike next month from the US Fed. | |
| Investors see the ADP data as a “heads-up” ahead of the official Non-Farm Payroll report which is due out this Friday. It certainly is effective in measuring the overall trend in the data, but it can be patchy on a month-by-month basis. This is because the government’s number tends to be considerably more volatile, and of course it is this volatility that traders look for and react to. So the fact that today’s release was so far away from trend will have traders scratching their heads. It may be positive for risk assets for the Fed to hold off from hiking rates, but it sends a grim message about the US economy. | |
| 1.19pm BST | |
| 13:19 | |
| USA ADP employment report announcement - Actual: 156.0k, Expected: 196k pic.twitter.com/WdZUAMhyvb | |
| 1.16pm BST | |
| 13:16 | |
| US jobs figures lower than expected | |
| Ahead of Friday’s US non-farm payroll numbers, the monthly survey of private sector jobs from ADP came in much lower than expected. | |
| ADP said US employment increased by 156,000 private sector jobs in April, compared to 200,000 last month and expectations of a rise of between 195,000 and 200,000 this time round. | |
| US ADP Employment Change (Apr) +156K versus +195K expected, previous +200K revised +194K | |
| Updated | |
| at 1.20pm BST | |
| 12.49pm BST | 12.49pm BST |
| 12:49 | 12:49 |
| London Stock Exchange shares fall 7% as ICE rules out bid | London Stock Exchange shares fall 7% as ICE rules out bid |
| London Stock Exchange shares have dropped more than 7% after Intercontinental Exchange ruled out a bid, leaving the way clear for LSE’s proposed merger with Deutsche Börse. | London Stock Exchange shares have dropped more than 7% after Intercontinental Exchange ruled out a bid, leaving the way clear for LSE’s proposed merger with Deutsche Börse. |
| New York stock exchange owner ICE said in March it was considering an offer for the LSE, but now says: | New York stock exchange owner ICE said in March it was considering an offer for the LSE, but now says: |
| Following due diligence on the information made available, ICE determined there was insufficient engagement to confirm the potential market and shareholder benefits of a strategic combination. | Following due diligence on the information made available, ICE determined there was insufficient engagement to confirm the potential market and shareholder benefits of a strategic combination. |
| So it has “no current intention” to make a bid which rules it out for six months unless it receives the consent of the Takeover Panel. | So it has “no current intention” to make a bid which rules it out for six months unless it receives the consent of the Takeover Panel. |
| 12.32pm BST | 12.32pm BST |
| 12:32 | 12:32 |
| Greek manufacturing edged higher in April, but still showed a contraction for the third month in a row. | Greek manufacturing edged higher in April, but still showed a contraction for the third month in a row. |
| Markit’s manufacturing purchasing managers index came in at 49.7, up from 49 in March but still below the 50 level which signals expansion. Markit said: | Markit’s manufacturing purchasing managers index came in at 49.7, up from 49 in March but still below the 50 level which signals expansion. Markit said: |
| The downturn in the manufacturing sector of Greece continued during April. Incoming new orders fell for a further month while outstanding business levels deteriorated. However, job creation was still evident in the sector and volumes of production stabilised after three months of contraction. | The downturn in the manufacturing sector of Greece continued during April. Incoming new orders fell for a further month while outstanding business levels deteriorated. However, job creation was still evident in the sector and volumes of production stabilised after three months of contraction. |
| The downturn in the manufacturing sector of #Greece continued during April as #PMI posts 49.7 (49.0 in March) https://t.co/yEa6VeGwGd | The downturn in the manufacturing sector of #Greece continued during April as #PMI posts 49.7 (49.0 in March) https://t.co/yEa6VeGwGd |
| But there were some encouraging signs, according to Markit economist Samuel Agass who said: | But there were some encouraging signs, according to Markit economist Samuel Agass who said: |
| April survey data was mixed for Greek goods producers. On the one hand, the headline PMI remains below the crucial 50.0 no-change mark, thus signalling a further downturn in the manufacturing sector of Greece. Incoming new orders are still on the decline and outstanding business levels again deteriorated at a substantial pace, with a downturn in the construction sector hampering economic growth according to panellists. | April survey data was mixed for Greek goods producers. On the one hand, the headline PMI remains below the crucial 50.0 no-change mark, thus signalling a further downturn in the manufacturing sector of Greece. Incoming new orders are still on the decline and outstanding business levels again deteriorated at a substantial pace, with a downturn in the construction sector hampering economic growth according to panellists. |
| However, production stabilised for the first time during 2016 and job creation was still evident, highlighting firms’ intentions to invigorate future output with increased manpower. Likewise, purchasing activity rose for the first time since August 2014, highlighting that there are some encouraging signs pointing to a revival in the manufacturing sector of Greece over the coming few months. | However, production stabilised for the first time during 2016 and job creation was still evident, highlighting firms’ intentions to invigorate future output with increased manpower. Likewise, purchasing activity rose for the first time since August 2014, highlighting that there are some encouraging signs pointing to a revival in the manufacturing sector of Greece over the coming few months. |
| 12.03pm BST | 12.03pm BST |
| 12:03 | 12:03 |
| China has been forced to dip into its emergency pork reserves after seeing prices hit record highs. | China has been forced to dip into its emergency pork reserves after seeing prices hit record highs. |
| With breeding sows in short supply, and domestic demand swelling, Beijing has decided to release 3.05 million kilograms of frozen pork reserves over the next month. | With breeding sows in short supply, and domestic demand swelling, Beijing has decided to release 3.05 million kilograms of frozen pork reserves over the next month. |
| The FT explains how pork prices have been sizzling recently: | The FT explains how pork prices have been sizzling recently: |
| Policymakers have good reason to want to keep pork prices under control: China produces and consumes more pork than any other country on Earth, and the meat factors heavily into the CPI basket used to calculate overall consumer inflation. | Policymakers have good reason to want to keep pork prices under control: China produces and consumes more pork than any other country on Earth, and the meat factors heavily into the CPI basket used to calculate overall consumer inflation. |
| In March the official consumer price index rose 2.3 per cent year on year, with a rise of 28.4 per cent by pork prices during the period contributing 0.64 percentage points. | In March the official consumer price index rose 2.3 per cent year on year, with a rise of 28.4 per cent by pork prices during the period contributing 0.64 percentage points. |
| The pork crisis could also be a consequence of China’s industrial revolution. There are now more wealthier middle-class consumers bringing home the bacon, and keen to eat expensive food, but fewer agricultural workers tending the piglets. | The pork crisis could also be a consequence of China’s industrial revolution. There are now more wealthier middle-class consumers bringing home the bacon, and keen to eat expensive food, but fewer agricultural workers tending the piglets. |
| #China going whole hog: Beijing taps emergency pork reserves as prices hit record high https://t.co/4lV8iH4t8M pic.twitter.com/gbZQ5Oc3Vx | #China going whole hog: Beijing taps emergency pork reserves as prices hit record high https://t.co/4lV8iH4t8M pic.twitter.com/gbZQ5Oc3Vx |
| 11.40am BST | 11.40am BST |
| 11:40 | 11:40 |
| Markets keep falling | Markets keep falling |
| European stock markets have suffered another morning of hefty losses, as economic worries ripple through trading floors again. | European stock markets have suffered another morning of hefty losses, as economic worries ripple through trading floors again. |
| The FTSE 100 has hit a new three-week low, down 76 points or 1.2% at 6109 points, while France and Germany are both down around 0.75% | The FTSE 100 has hit a new three-week low, down 76 points or 1.2% at 6109 points, while France and Germany are both down around 0.75% |
| The slowdown in Britain’s construction sector, following a shock contraction in manufacturing yesterday, hasn’t helped the mood in the City. | The slowdown in Britain’s construction sector, following a shock contraction in manufacturing yesterday, hasn’t helped the mood in the City. |
| Disappointing Chinese and US factory data released this week has also dampened optimism. | Disappointing Chinese and US factory data released this week has also dampened optimism. |
| Global manuf PMI edged down to 50.1 in Apr. On past form, consistent with world GDP growth of just 2½%. Weak! pic.twitter.com/QRneLChVq6 | Global manuf PMI edged down to 50.1 in Apr. On past form, consistent with world GDP growth of just 2½%. Weak! pic.twitter.com/QRneLChVq6 |
| There may also be a Trump effect. Wall Street is being called down, after the Donald all-but wrapped up the Republican nomination overnight. | There may also be a Trump effect. Wall Street is being called down, after the Donald all-but wrapped up the Republican nomination overnight. |
| Trump selloff pic.twitter.com/G0v9RmloBR | Trump selloff pic.twitter.com/G0v9RmloBR |
| Mihir Kapadia, CEO at Sun Global Investments, reckons investors are pretty uneasey today. | Mihir Kapadia, CEO at Sun Global Investments, reckons investors are pretty uneasey today. |
| ‘’A decline in US stocks last night has been followed by another weak day in Asian Indices today, as commodities and bonds are also selling off. Investors appear to remain generally uneasy about the state of the global economy, with the latest agitation coming from the Reserve Bank of Australia deciding on Tuesday to cut its benchmark rate to 1.75%, reflecting soft inflation and, like many others, general economic malaise. A contributing factor to Australia’s economic woes has been a drop in demand from a weary China, which has its own problems as its economy looks to be losing steam on the back of some weak manufacturing data. | ‘’A decline in US stocks last night has been followed by another weak day in Asian Indices today, as commodities and bonds are also selling off. Investors appear to remain generally uneasy about the state of the global economy, with the latest agitation coming from the Reserve Bank of Australia deciding on Tuesday to cut its benchmark rate to 1.75%, reflecting soft inflation and, like many others, general economic malaise. A contributing factor to Australia’s economic woes has been a drop in demand from a weary China, which has its own problems as its economy looks to be losing steam on the back of some weak manufacturing data. |
| Another country with weak manufacturing data is the UK – reports suggesting manufacturing activity contracted in April for the first time since March 2013. The slowdown in the oil industry is certainly hitting production, with firms also blaming soft domestic demand combined with a fall in foreign business. | Another country with weak manufacturing data is the UK – reports suggesting manufacturing activity contracted in April for the first time since March 2013. The slowdown in the oil industry is certainly hitting production, with firms also blaming soft domestic demand combined with a fall in foreign business. |
| 11.25am BST | 11.25am BST |
| 11:25 | 11:25 |
| Here’s our news story on the construction slowdown: | Here’s our news story on the construction slowdown: |
| Related: UK construction sector sees slowest expansion since mid-2013 | Related: UK construction sector sees slowest expansion since mid-2013 |
| 11.13am BST | 11.13am BST |
| 11:13 | 11:13 |
| Last Friday, we got terribly excited by the news that the eurozone had grown by 0.6% in the first quarter of 2016, outpacing Britain and America. | Last Friday, we got terribly excited by the news that the eurozone had grown by 0.6% in the first quarter of 2016, outpacing Britain and America. |
| But perhaps this was premature... | But perhaps this was premature... |
| New data today shows that retail sales fell by 0.5% in March, which could suggest growth was less buoyant than hoped. | New data today shows that retail sales fell by 0.5% in March, which could suggest growth was less buoyant than hoped. |
| Carsten Brzeski of ING fears the data could be revised down in a few weeks (when eurostat will have more data to play with) | Carsten Brzeski of ING fears the data could be revised down in a few weeks (when eurostat will have more data to play with) |
| Weak Eurozone retail sales data in March are first warning that strong GDP growth in first quarter could become subject to downward revision | Weak Eurozone retail sales data in March are first warning that strong GDP growth in first quarter could become subject to downward revision |
| 10.53am BST | 10.53am BST |
| 10:53 | 10:53 |
| The BBC’s Kamal Ahmed and Sam Tombs of Pantheon Economics are both concerned by the slowdown in UK construction growth. | The BBC’s Kamal Ahmed and Sam Tombs of Pantheon Economics are both concerned by the slowdown in UK construction growth. |
| More evidence of weakening UK economy - construction PMI weakest for three years. "New order volumes stagnating" says the Market/CIPS survey | More evidence of weakening UK economy - construction PMI weakest for three years. "New order volumes stagnating" says the Market/CIPS survey |
| Another UK survey; another multi-year low. April #Construction PMI weakest since Jun 2013, pointing to ↓output: pic.twitter.com/Jthlrvq9AH | Another UK survey; another multi-year low. April #Construction PMI weakest since Jun 2013, pointing to ↓output: pic.twitter.com/Jthlrvq9AH |
| 10.37am BST | 10.37am BST |
| 10:37 | 10:37 |
| This drop in construction growth comes as Barclays unleashes a no-deposit mortgage on the market. | This drop in construction growth comes as Barclays unleashes a no-deposit mortgage on the market. |
| Technically, a parent does need to provide a 10% deposit, but that will be returned - with interest - if their little darling manages to keep up the monthly payments. | Technically, a parent does need to provide a 10% deposit, but that will be returned - with interest - if their little darling manages to keep up the monthly payments. |
| Related: Barclays offers 0% deposit mortgage to home buyers | Related: Barclays offers 0% deposit mortgage to home buyers |
| So for the first time since the collapse of Northern Rock, a major high-street lender is effectively offering to lend the full value of a property. This could be a worrying moment... | So for the first time since the collapse of Northern Rock, a major high-street lender is effectively offering to lend the full value of a property. This could be a worrying moment... |
| Nothing to see here... pic.twitter.com/TkfnXfz9nd | Nothing to see here... pic.twitter.com/TkfnXfz9nd |
| However, before the credit crunch of 2007, some riskier UK banks would actually lend you 125% of a property’s value. We’re not quite at panic levels yet... | However, before the credit crunch of 2007, some riskier UK banks would actually lend you 125% of a property’s value. We’re not quite at panic levels yet... |
| Updated | Updated |
| at 10.49am BST | at 10.49am BST |
| 9.54am BST | 9.54am BST |
| 09:54 | 09:54 |
| David Noble of the Chartered Institute of Procurement & Supply also blames Brexit fears for the slump in construction sector growth. | David Noble of the Chartered Institute of Procurement & Supply also blames Brexit fears for the slump in construction sector growth. |
| “Fears over weaker UK and global economic growth dealt a blow to confidence in the construction sector, leading to delays in new spending commitments. The prospect of the EU referendum and its outcome in June are likely to add to uncertainty too, with many construction firms preferring to wait and see what happens before making any decisions. | “Fears over weaker UK and global economic growth dealt a blow to confidence in the construction sector, leading to delays in new spending commitments. The prospect of the EU referendum and its outcome in June are likely to add to uncertainty too, with many construction firms preferring to wait and see what happens before making any decisions. |
| “Construction companies adopted a more cautious approach to purchasing and hiring, leading to a rise in sub-contractor usage to tide them over until the outlook becomes clearer. The slowdown in new order growth in April suggests that though spring may be in the air, sunnier times may still be a way off for the construction sector, at least for the time being.” | “Construction companies adopted a more cautious approach to purchasing and hiring, leading to a rise in sub-contractor usage to tide them over until the outlook becomes clearer. The slowdown in new order growth in April suggests that though spring may be in the air, sunnier times may still be a way off for the construction sector, at least for the time being.” |
| 9.39am BST | 9.39am BST |
| 09:39 | 09:39 |
| UK construction sector growth hits three-year low | UK construction sector growth hits three-year low |
| Breaking: Growth across Britain’s construction sector has slowed to a near three-year low. | Breaking: Growth across Britain’s construction sector has slowed to a near three-year low. |
| Fears over Britain’s EU referendum, and weakness in housebuilding are to blame -- as concerns about the strength of the UK recovery grow. | Fears over Britain’s EU referendum, and weakness in housebuilding are to blame -- as concerns about the strength of the UK recovery grow. |
| Data firm Markit reports that its construction PMI, which measures activity across hundreds of building firms, has fallen from 54.2 in March to 52.0 in April. | Data firm Markit reports that its construction PMI, which measures activity across hundreds of building firms, has fallen from 54.2 in March to 52.0 in April. |
| That’s the slowest since June 2013. | That’s the slowest since June 2013. |
| Companies reported that new orders had stagnated, as the clients suspended spending. | Companies reported that new orders had stagnated, as the clients suspended spending. |
| With “heightened uncertainty about the economic outlook”, some customers aren’t prepared to commit to new projects. Britain’s EU vote, on June 23rd, is a key | With “heightened uncertainty about the economic outlook”, some customers aren’t prepared to commit to new projects. Britain’s EU vote, on June 23rd, is a key |
| Tim Moore, senior economist at Markit, warns that the UK construction sector appears to be struggling: | Tim Moore, senior economist at Markit, warns that the UK construction sector appears to be struggling: |
| “UK construction firms reported their worst month for almost three years in April, meaning that the first quarter slowdown is unlikely to prove temporary. | “UK construction firms reported their worst month for almost three years in April, meaning that the first quarter slowdown is unlikely to prove temporary. |
| “Stalling new order volumes not only set the scene for further weakness ahead, but are already weighing on staff hiring and input buying across the construction sector. | “Stalling new order volumes not only set the scene for further weakness ahead, but are already weighing on staff hiring and input buying across the construction sector. |
| “Softer growth forecasts for the UK economy alongside uncertainty ahead of the EU referendum appear to have provided reasons for clients to delay major spending decisions until the fog has lifted. | “Softer growth forecasts for the UK economy alongside uncertainty ahead of the EU referendum appear to have provided reasons for clients to delay major spending decisions until the fog has lifted. |
| “An additional factor dragging on construction sector performance is the lack of momentum in residential building. April’s survey highlighted one of the weakest rises in housing activity since early-2013, suggesting that greater caution in this sub-sector is adding to the sluggish growth conditions seen across the wider construction industry.” | “An additional factor dragging on construction sector performance is the lack of momentum in residential building. April’s survey highlighted one of the weakest rises in housing activity since early-2013, suggesting that greater caution in this sub-sector is adding to the sluggish growth conditions seen across the wider construction industry.” |
| Updated | Updated |
| at 9.48am BST | at 9.48am BST |