The index dwindled down to 57.6 in March, from 58.2 in February. It is the fifth time this index has fallen since June last year. However, the weighting is still above the 50.0 mark which points toward growth in the sector.
Incoming new business volumes continued to rise during March, but at a slower rate.
The downward trend was reflected in earlier PMI surveys this week, which indicated a slowdown in the construction and manufacturing sectors.
“The drop in price pressures alongside the more moderate pace of growth takes pressure off the Bank of England to start tightening policy, which should in turn take some pressure off sterling,” chief economist at Markit, Chris Williamson, said.
According to Adrian Lowcock, senior investment manager at Hargreaves Lansdown, the services sector in the UK is still dominated by the banking sector. With banks still emerging out of debt, the services sector is more likely to see the tail end of the economic recovery.
“This is not a normal recovery. Once confidence builds, the services sector will start seeing a recovery,” he said.
“It is important to remember that the UK is not in normal economic recovery. We can’t read too much into each point because it is a slow recovery, and not only reflecting UK growth. The services sector is also exposed to Europe.”
