UK construction growth hits three-year low as 'Brexit fog' hurts confidence - business live
Building firms hit by falling confidence ahead of June EU referendum
- Latest: UK building growth weakens
- CIPS: Clouds of uncertainty over building sector
- Eurozone's slow recovery continues
- Miners are dragging the FTSE down
- Next cuts sales forecasts again
11.40am BST
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%
Global manuf PMI edged down to 50.1 in Apr. On past form, consistent with world GDP growth of just 2%. Weak! pic.twitter.com/QRneLChVq6
Trump selloff pic.twitter.com/G0v9RmloBR
''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.
11.25am BST
Here's our news story on the construction slowdown:
Related: UK construction sector sees slowest expansion since mid-2013
11.13am BST
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...
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
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
Another UK survey; another multi-year low. April #Construction PMI weakest since Jun 2013, pointing to aoutput: pic.twitter.com/Jthlrvq9AH
10.37am BST
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.
Related: Barclays offers 0% deposit mortgage to home buyers
Nothing to see here... pic.twitter.com/TkfnXfz9nd
9.54am BST
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.
"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
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.
"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.
9.32am BST
Howard Archer of IHS Global Insight agrees that the eurozone PMIs are 'lacklustre', but remains hopeful that growth will pick up.
While they have firmed recently, oil and commodity prices and the euro are still at levels that are supportive to Eurozone growth. Major ECB stimulus that was enhanced in March will increasingly kick in over the coming months, while the fiscal stance across the Eurozone is gradually becoming more growth orientated with increasing fiscal stimulative measures being introduced in a number of countries (along with increased public spending to deal with the influx of migrants).
Meanwhile, generally improved job markets across the Eurozone are supportive to consumer spending along with the boost to purchasing power coming from negligible deflation/inflation.
9.14am BST
Europe's private sector continued to recover in April, although the revival is less than spectacular.
That's according to data firm Markit, whose composite PMI (which measures private sector growth) has come in at 53.0 in April. That's only a smidgen below March's 53.1, and means 34 months of unbroken growth.
"The final PMI data confirm the earlier flash estimate that the eurozone economy grew at a steady but unspectacular annual rate of 1.5% at the start of the second quarter. Prices charged also continued to fall, indicating that growth is being partly fuelled by price discounting.
"However, while still tepid, the sustained eurozone growth contrasts with slowdowns in the US and UK, suggesting the ECB's more aggressive stimulus is helping to drive a steady recovery. The survey numbers also indicate that domestic demand within the eurozone is picking up which, alongside the weaker currency, is helping to offset sluggish external demand.
8.59am BST
German service sector growth has slowed; its PMI has dipped to 54.5, from 55.1in March.
That still shows expansion, but the slowest rate since last winter.
#Germany's service sector continued to grow at a steady pace at start of Q2, despite index dropping to 5-month low https://t.co/DRjgl6ONkk
8.52am BST
France's service sector has clawed its way back to growth, with the PMI rising to 50.6 from 49.9 in March.
French Service PMI (Apr F) 50.6 versus 50.8 flash, previous 49.9
8.46am BST
The first eurozone service sector data is out, and it shows that Spanish companies continued to grow last month.
The Spanish Services PMI, which tracks activity across the sector, has dipped slightly to 55.1, from 55.3. That's comfortably over the 50-point mark that separates expansion from contraction.
Latest #PMI data suggest that economic growth in #Spain remained marked at start of Q2 https://t.co/DD8HaCYAVb pic.twitter.com/TUc4IzCXZa
Spanish PMIs - Political crisis? What political crisis?
8.43am BST
Mining shares are being hit this morning, pulling the London stock market into the red.
Worries over the global economy are being blamed as BHP Billiton sheds 5% and Anglo American loses 3%.
The elevated concerns over the health of the global economy complimented with the incessant declines in oil prices have soured investor risk appetite, consequently leaving the FTSE100 vulnerable to further losses.
8.21am BST
The ongoing supermarket price wars have hit profits at supermarket chain J Sainsbury's.
Related: Sainsbury's sales and profits fall amid price cuts
8.12am BST
Next's warning on sales and profits could spell bad news for other retailers too.
James McGregor, partner at Retail Remedy retail consultants, explains:
It was inevitable that the weather would feature in some way in Next's trading update and we have not been disappointed. If Next have been challenged by the unseasonal weather this season, then we can assume that the majority of fashion retailers are really suffering.....
To lower Next's full price sales guidance range to -3.5%, indicates a sense of nervousness. Ever cautious, we are not surprised to hear Lord Wolfson warn of difficult trading ahead. His caution is understandable though, poor sell throughs are costly. The weather is finally going the right way but the customer might yet hold off buying her beachwear.
7.51am BST
Retail group Next has got the morning off to a bad start, by cutting its sales guidance for the second time in two months.
Though sales have improved in the past few days as weather has improved, the company said demand for clothes could stay weak.
In the three months to 2 May Next's total sales fell by 0.2% and full-price sales dropped 0.9%, at the low end of full-year sales guidance of -1% to 4%.
Related: Next warns on sales and profits
7.32am BST
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
After yesterday's jitteriness, traders in Europe are pretty cautious as they wait for a flurry of economic news.
The Spanish economy has been notable for its outperformance in recent months despite continuing high levels of unemployment and today's latest numbers are expected to come in at 55.1, while Germany is expected to remain unchanged at 54.6.
On the downside the French numbers have consistently underperformed, though we are expecting to see a pick up to 50.8 as the French services sector strives to shake off the after effects of the November attacks in Paris.
Our European opening calls:$FTSE 6182 down 4
$DAX 9921 down 6
$CAC 4361 down 11$IBEX 8745 down 20$MIB 17950 down 16