The rising pound has showed no sign of abating after reaching a near-term high whilst construction failed to 'hold-up' as much as expected. The Purchasing Manager's Index reached a three month low of 54.1, compared with 57.5 predicted.
The pound however gained to a near-term high, as construction activity remains strong in forex traders' eyes, reaching $1.5947 by 13:30 BST leading economists to speculate on the future of exports and manufacturing.
"The weakness of demand in the euro-zone, coupled with the pound's recent appreciation, appear to have brought the export recovery to a halt...with exports struggling, there is further evidence here that industry won't make such a positive contribution to overall economic growth in the second half of the year." said Jonathan Loynes, Capital Economics.
"The Markit/CIPS purchasing managers survey points to a marked loss of momentum in construction activity in July. Not only did output growth slow appreciably, but new orders growth moderated, business expectations fell to a 15-month low and employment contracted anew in the sector. This reinforces suspicion that the 6.6% quarter-on-quarter jump in construction output in the second quarter reported in the preliminary national accounts substantially overstated the true strength of the sector even allowing for the fact that there had been some catch-up in activity due to the very bad weather at the start of the year." added Howard Archer, IHS Global.
"While the construction sector's recovery still appears to be intact after extended, deep recession, the loss of momentum evident in the July purchasing managers' survey highlights the fact that the sector continues to face a very challenging environment. This will likely cause the recovery to be gradual overall and bumpy."