The UKs service sector experienced its sharpest rise in business activity recorded since December 2016 last month, supported by the fastest upturn in new work so far this year.
This was linked to resilient business-to-business demand, new product launches and a rise in sales to overseas clients, while job creation also picked up to a four-month high.
These were the main findings from the Markit/CIPS Purchasing Managers' Index, released yesterday, which reveals four times as many service providers are confident about growth this year than those who are not.
"The UK's biggest sector started Q2 in stellar fashion, with the strongest performance so far this year and with new business growth riding high," CIPS director of customer relationships, Duncan Brock, said.
"A supportive economic backdrop helped to boost the UK service sector, with resilient demand reported both at home and from abroad.
"Going full steam ahead with staff hires rising at one of the fastest rates since last summer relieved capacity pressures, and provides a signal that service providers anticipate additional growth in the coming months."
Despite increased business activity, average prices charged by services firms increased at the fastest pace recorded since July 2008, due to a strong rise in input costs, mostly linked to utility bills, salary payments and food prices.
These inflationary pressures resulted in subdued consumer spending, with anecdotal evidence suggesting increased business-to-business sales helped to offset this, although this is not expected to be sustainable.
"The driver of growth came primarily from business clients, as consumers took a back seat, uneasy about rising costs for essentials such as food, fuel and energy," Brock continued.
"As prices and supply chain pressures will be the focus for business in the coming months, it is the consumer who will make or break the sector's progress if the political headwinds are favourable, disposable incomes improve and the pound's lacklustre performance improves."
The growth in the service sector rounds off a hat-trick of positive results from Markit/CIPS this week, with construction also found to have hit a four-month high in April, while manufacturing increased to its highest level in three years.
