Growth in Britain's service sector is solid, according to a private industry survey, with significant gains in new business, although the ongoing eurozone crisis and tough UK economic environment are weighing heavily on future confidence.
The UK service sector's purchasing managers index (PMI) figure came in at 53.3 for May, matching April's figure, offering some hope that the UK is finding its way out of recession in the second quarter of the year.
Anything above the neutral 50 figure represents growth, while anything below reflects a contraction.
Britain's service sector accounts for around three quarters of its total GDP output.
"It's a relief to see the UK's services sector posting steady growth for the seventeenth consecutive month, but the twists and turns of the eurozone crisis and the potential tumble in domestic demand post-Olympics is a source of increased trepidation," said David Noble, chief executive at the Chartered Institute of Purchasing & Supply (CIPS), which compiles the survey with researchers Markit.
Employment in the sector also increased at a solid rate, but confidence fell to a five-month low.
Positive PMI data early in 2012 was at odds with official figures from the Office for National Statistics (ONS), which had been reporting declining output across Britain's economy.
The ONS eventually reported that the UK is back in recession, after a second consecutive quarterly contraction in GDP output of -0.3 percent in the first quarter of the year.
"This morning's figure from the UK services sector is solid but it's certainly nothing to get too excited about," said Richard Driver, analyst for Caxton FX.
"Nonetheless, it is a relief to see that the UK services sector is firmly in expansion territory, even if the UK economy as a whole is contracting slightly.
"These PMI surveys have however lost a little bit of credibility given the positive surveys that characterised Q1."