By Jonathan Davies
Growth in the UK services sector picked up paced in the March, according to a closely watched survey.
The Markit services Purchasing Managers' Index (PMI) survey showed that the sector grew at its fastest pace for seven months, with a score of 58.9 in March.
Any figure above 50 indicates growth. The PMI was up from 56.7 in February.
Although Markit's PMI surveys are all closely watched, the service sector is particularly important as it accounts for around 70% of UK GDP.
The sector was driven by a stronger rise in new business. Growth over the first quarter as a whole was faster than that seen in the final three months of last year. The volume of outstanding business rose at a faster rate, despite a further marked increase in employment. Price pressures remained subdued, with input price inflation unchanged from February and prices charged by service sector companies barely rising in March.
Growth in activity was attributed by survey respondents to a wider economic recovery, improving confidence, winning new customers and new product development. Higher workloads also reflected a further marked increase in the volume of new business, which rose for the 27th consecutive month. The rate of growth in new contracts accelerated to the highest since last September.
“The UK economy moved up a gear in March," Chris Williamson, chief economist at Markit, said.
“Faster growth of new business and improved
expectations of prospects for the year ahead also
bode well for the upturn to retain strong momentum
as we move through the spring."