London, United Kingdom (4E) – The services sector in the UK grew at a moderate pace for the fifth consecutive month in March, but stayed strong enough to reinforce forecasts that gross domestic product (GDP) expanded 0.7 percent in the first quarter of 2014, according to a survey released Thursday.
Data compiler Markit and the Chartered Institute of Purchasing & Supply released a monthly purchasing managers index (PMI) for the services sector showing that growth eased to 57.6 in March. The reading is the lowest level since June 2013, lower than analysts’ forecast for an increase to 58.5, and lower than 58.2 in February.
The slowdown in growth was because of lower gains across the sector as new business growth fell to 58.5 in March from 59.2 in February, while expansion in employment declined to 53.5 in March from 55.6 and business expectations fell to a four-month-low of 72.8 from February’s 74.7.
A reading higher than 50 indicates expansion in activity while below it suggests contraction. Despite the recent slowdown, the British services PMI has stayed above 50 since January 2013.
Despite the slower pace of growth, the all-sector PMI for the first three months of the year – the data Markit uses to estimate GDP growth using manufacturing, construction and services sector activity – shows at least a 0.7 percent gain quarter-on-quarter.