The UK services sector rebounded from its new year slowdown last month to grow at its fastest rate since December.
The latest research by Markit/CIPS shows business activity and new work both increased in March marking the strongest rate of growth for the sector so far in 2017.
Anecdotal evidence suggested that new product launches, improving client demand and increased confidence regarding the global economic outlook had all helped to boost sales in March.
This signalled a marked rebound from the five-month low seen in February.
Survey respondents also remained optimistic about the year-ahead, with almost half of the survey panel forecasting growth while only one-in-nine expect a fall in activity.
However, intense cost pressures continued in March, which led to the fastest rise in prices charged by service sector firms since September 2008.
Duncan Brock, director of customer relationships at the Chartered Institute of Procurement & Supply, said: “Taking March in isolation, the service sector defied the slowdown experienced by construction and manufacturing firms.
“A stronger end to the first quarter from the biggest contributor to UK GDP will provide some relief to the UK economy as a whole, shaken and stirred by continuing highs and lows since the Brexit vote.
“The weak pound gave reasons to be cheerful for exporters who reported renewed interest from overseas markets, especially clients based in the US.
“A dark blot on the sector’s performance was the lifeless job creation. At its lowest level since August 2016, the demand for higher wages bore down on profits and new staff hiring.
“So, the sector’s stalwart performance this month will need to improve significantly, before businesses raise their headcounts further.
“With input cost inflation still close to February’s eight and a half year peak, higher prices are likely to trickle further down the supply chain to consumers.
“Businesses will stop absorbing additional costs for basics such as energy and food, to remain profitable.”