IAN McCONNELL
UK services growth accelerated to its fastest pace in three months in March, having slowed significantly in February, while firms hiked prices at the sharpest rate since September 2008 as sterling’s post-Brexit vote weakness fuelled costs.
The Chartered Institute of Procurement & Supply’s business activity index for the UK services sector rose from 53.3 in February to 55 in March on a seasonally-adjusted basis, moving further above the level of 50 deemed to separate expansion from contraction to signal an acceleration of growth. The survey does not include the retail sector.
The acceleration of services expansion contrasts with slower manufacturing and construction growth signalled in surveys from CIPS earlier this week.
Growth of UK manufacturing output slowed in March to its weakest pace since the current run of expansion began in August last year. And UK construction sector expansion slowed last month to its joint-weakest pace since its current period of growth began in September 2016 as the rate of increase of housebuilding activity eased.
Although services growth accelerated in March, the pace of increase of employment in the sector slowed last month. And some services companies continued to cite delayed investment decisions amid Brexit uncertainty, CIPS noted.
Citing another sharp rise in costs for UK services sector firms in March, CIPS said: “Service providers cited the weak sterling exchange rate, alongside increased fuel and energy bills. A number of firms also commented on stronger salary pressures and higher food prices in March.”
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