A SURPRISE return to growth for the services sector recorded in May boosted hopes yesterday, suggesting that Britain could be the first major economy to recover from the financial crisis.<br /><br />The CIPS/Markit UK services sector purchasing managers’ index (PMI) released yesterday recorded a reading of 51.7, above the critical 50 mark that separates expansion from contraction for the first time since April 2008. <br /><br />The growth in the service sector, which makes up about 75 per cent of UK GDP, pushed the all-sector composite PMI to 50.4. “If sustained, the rise in the PMI surveys into June would indicate an increase in GDP as early as the second quarter,” said Markit’s chief economist Chris Williamson.” <br /><br />The data puts the UK ahead of both the Eurozone and America, whose surveys show continued contraction in May, albeit at a lesser rate.<br /><br />But other economists have said rising unemployment and lower consumer spending mean an output contraction in the second quarter is still likely, although weak growth in the third quarter was not ruled out. <br /><br />A more positive outlook was also indicated by the rise in service industries’ business expectations to 69.8 from 64.6, suggesting firms are more upbeat about the future. Mayor of London Boris Johnson spoke yesterday of a sense of building confidence and the potential to move forward.<br /><br />The PMIs point to clear signs of life but Vicky Redwood at Capital Economics, sounded a note of caution. “Returning to growth is one thing, getting it back to its potential rate or the even stronger rates necessary to eliminate the large amount of spare capacity that has built up is quite another,” she said<br /><br />Eurozone PMI and US ISM surveys were also released this week. The Eurozone composite PMI in May hit 44 – the highest was France with 46, followed by 44.1 in Germany. US ISM non-manufacturing came in at 44, below expectations of 45.