Confirmation that the service economy's long-running boom shows little sign of relenting has been re-inforced with the almost universal view that the Bank of England will again leave its interest rate unchanged today.
A fast-growing flow of new orders kept the service sector - other than retailing - expanding strongly last month, according to the monthly Purchasing Managers' survey published by the Chartered Institute of Purchasing & Supply.
The CIPS' March index dipped to 57.4 from a 22-month peak of 58.9 in February - but this was on a scale where anything upwards of
50 indicates expansion. Over the first quarter of the year the index showed its sharpest gain in any three months since April/May, 2004.
Marketing drives were success-fully winning new contracts, the CIPS said. There was also anecdotal evidence of clients becoming busier and more confident.
This sustained expansion is now creating jobs faster than before, with the sub-index for employment rising to 52.1 boosted by start-ups and established companies opening new offices.
"Purchasing managers reported another month of sharp growth in the UK services sector in March,
buoyed by increasing client activity and resulting gains in new business," said Roy Ayliffe, director of professional practice at the CIPS.
"Confidence about the future performance of the sector was tempered, however, by fears over the health of the wider UK economy, with spiralling operating costs also contributing to the subdued outlook."
Although service companies had more success than in the first two months of this year in passing rising costs on to their customers, reflected in an index of 53.2 for prices charged, their margins remained under pressure.
