Service sector growth drops to lowest level in nine months

Peter Spence
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UK plc activity shows no signs of stopping, but it might be slowing a little.

New data from Markit shows the UK's services purchasing managers' index at 57.6 in March. That level suggests that order growth in the sector is still surging.

Despite slipping from 58.2 last month, services are still well into expansionary territory, as implied by any number above 50. Analysts had expected a drop to just 58.1 this month.

The last couple of days have seen both construction and manufacturing PMIs disappoint, while both still in expansionary territory at 62.5 and 53.3 respectively. Chris Williamson, chief economist at Markit, says that while March "saw growth slow across the services, manufacturing and construction sectors, all three continue to expand at very strong rates".

A preview from Daiwa Capital Markets Europe suggests that we're continuining to see "robust expansion at the end of the first quarter" in services. Daiwa estimates that a composite number over 58 signals GDP growth being maintained at the 0.7 per cent seen in the final quarter of last year.