By Jonathan Davies
Growth in the UK services sector slowed slightly in February, according to a closely watched survey.
The Markit/CIPS services purchasing managers' index (PMI) recorded a score of 56.7 in February, down from 57.2 in January and below expectations for 57.5.
Any figure above 50 indicates growth and 56.7 still suggests strong growth in the sector.
Growth in the services sector is so crucial because it accounts for around 70% of the UK's entire economy.
Businesses were boosted with a sharp rise in new contracts and job creation grew at its second highest rate in the survey's history, driven by backlogs of work.
Chris Williamson, Chief Economist at Markit, said: “The UK economy is enjoying yet another impressive performance in the first quarter, with robust growth feeding through to near-record job creation.
“Although the rate of expansion slowed in the vast services economy, growth has picked up in both manufacturing and construction. The three PMI surveys collectively indicated a slight acceleration in economic growth for a second successive month in February as a result, consistent with GDP growth picking up to 0.6% in the first quarter.
“Employment growth across the three sectors has also accelerated so far this year, to a near-record rate, and there are welcome signs that the labour market tightening is feeding through to higher wages."
Jeremy Cook, chief economist at the international payments company, World First, said: “Data from the UK services sector remained solid in February and continues the belief that any dip in fortunes seen towards the end of last year was merely a blip.
“The services sector continues to add jobs, with February’s additions coming at the second highest rate on record. Higher wages are also being seen for sector participants which is a necessary and welcome reaction to tightness in the labour market and competition between companies."
