Statistics from the Markit/CIPS UK Services PMI reveals that the headline seasonally adjusted Business Activity Index registered 52.4 in March, up from the 51.8 in February.
The figure is the highest seen for seven survey periods and is a reflection, the survey says, of new business volumes rising at a rate not seen since May 2012 and business confidence being a ten-month high.
Also contained within the study is the finding that clients reported showing improved confidence regarding a willingness to take on new contracts.
The Bank of England and the government, Chris Williamson says, will breathe sighs of relief in seeing signs of a gathering upturn in the services sector.
The chief economist at survey compliers Markit adds, ‘Business activity grew in March at the fastest rate since the Olympics-related upturn seen last August, providing a much needed boost to the economy in the first quarter after disappointing surveys for the smaller manufacturing and construction sectors.’
More on Markit/CIPS surveys:
With confidence amongst UK service providers at its highest level since last May, 47 per cent of the survey panel anticipate higher activity.
On the price front, average operating costs continued to decrease. The degree of inflation remained marked with fuel, food and utility prices all reported to have risen since the previous month.
Richard Driver, currency analyst at Caxton FX, comments, ‘The services sector looks to have saved the day once again and this should tip the balance towards a Q1 GDP figure of +0.1 per cent, meaning a triple-dip recession should be avoided.
‘The bad weather in Q1 has probably made things seem a little worse than they in fact are. We expect things to pick up in Q2, though the pace of growth will remain weak throughout 2013.’
