Tuesday, April 05, 2011
Service sector strong, Chambers of Commerce downbeat
Posted by David Smith at 11:00 AM
Category: Thoughts and responses

Reading the economy from the surveys is never easy. The Chartered Institute of Purchasing and Supply and Markit have come up with a strong service sector purchasing managers' index for March. It rose from 52.6 in February to 57.1 and, reassuringly, firms raised their prices at a slower rate.

This was Markit's summary: "UK service sector activity growth surged in March to its strongest for thirteen months, as companies benefited from improved business conditions, higher sales and increased enquiries. Capacity levels were tested, leading to a slight rise in employment for the first time in nine months. However, optimism regarding future activity was slightly down since the previous month.

"On the prices front, input costs continued to rise at a marked pace, with the rate of inflation only slightly lower than January’s two-and-a-half year peak. Nonetheless, the degree of pass through remained muted – output charges rose at their slowest pace of the year so far."

This upbeat survey, said to be consistent with 0.8% first quarter growth, contrasted with a downbeat British Chambers of Commerce survey. It described its first quarter survey as disappointing, with the recovery mediocre. Its press release can be accessed here.