The service sector has grown for the first time in over a year, according to May’s CIPS/Markit report.
The purchasing manager’s index (PMI) recorded a reading of 51.7, up from 48.7 in April, above the crucial 50 no-change mark for the first time since April 2008, signalling a return to growth of service sector activity.
Growth was boosted by continued discounting supporting sales, while business confidence rose markedly reach its highest level since October 2007.
Roy Ayliffe, director of professional practice at the Chartered Institute of Purchasing & Supply (CIPS), says: “The UK services sector has bounced back much quicker than expected, demonstrating that it really is the engine of the modern economy. May saw the first growth in the sector for 13 months on the back of increased business activity and new orders.
Benjamin Williamson, economist at centre for economics and business research, adds: “Today’s release is the third in a row to show a sizeable increase in the PMI for its respective sector. The three major sectors of manufacturing, construction and services are all now showing their best pace of growth in at least a year.
“If the rate of change in activity continues in this way, all three sectors could see a return to positive growth within the next few months. This would mean an almost certain return to economic growth by the end of the year.”