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Pace of growth in UK service sector eased off in February

GROWTH in the UK's dominant services sector eased in February to its slowest monthly pace since last June, a survey has shown.

But the survey, published yesterday by the Chartered Institute of Purchasing and Supply (Cips), also showed a strengthening of confidence among services companies to the best level for nearly four-and-a-half years.

Cips' business activity index for services fell from 58.3 in January to 58.2 in February on a seasonally-adjusted basis. However, it remained well above the level of 50 deemed by Cips to separate expansion from contraction.

The employment index edged up from 55.5 in January to 55.6 in February, to signal a marginal acceleration in the rate of recruitment.

And services companies surveyed by Cips signalled the greatest confidence in their prospects for activity in the year ahead since September 2009.

The pace of new order growth for the services sector accelerated between January and February, according to Cips.

Chris Williamson, chief economist at survey compiler Markit, said: "The services economy notched up yet another month of robust growth in February, a performance that is all the more remarkable given the weather-related disruptions that have hit many businesses."

Mr Williamson believed Cips' monthly surveys of the UK services, manufacturing and construction sectors were together pointing to gross domestic product growth of about 0.7% in the current quarter.

David Noble, chief executive of Cips, believed all signs pointed to continuation of growth in the service sector, and highlighted firms' increased confidence.

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