The eurozone's dominant services sector had to draw on backlogs of work to keep activity levels steady in March, but in Britain companies were able to attract a lot of new business, surveys showed yesterday.
The NTC Research Business Activity Index, which covers some 2,000 service sector companies in five eurozone countries, came in at 53.0 in March, unchanged from the previous month and slightly above the consensus forecast of 52.7.
But in Britain growth in the services sector hit a 10-month high, with the CIPS/NTC Research business activity index rising to 57.0 from 55.1.
"We seem to be on an upward trend again in the UK, in terms of the rate of growth (and) firms returning to the recruitment market," said NTC's chief economist Chris Williamson.
In the eurozone, "the flat picture masks what we see as a downward trend in business levels in all countries," he added.
"Activity growth is only being supported by firms eating into orders that have been received in previous months."
The eurozone new business index slipped to a three-month low of 51.4 from February's 52.0. The outstanding business gauge slipped to 48.7, coming in below the 50 waterline between growth and contraction for the second month running and giving its weakest reading in a year-and-a- half.
"Unless we see a turnaround in the new business indicator in the coming months, we are likely to see business activity slowing down quite sharply," Mr Williamson said.
An equivalent US survey from the Institute for Supply Management, released earlier than expected on Friday, showed the US service sector gauge also ticked up in March, to 63.1 from 59.8, as companies secured more business.
The services PMIs, together with companion surveys on manufacturing, imply that the British economy grew by a quarterly 0.8 per cent in the first quarter of this year.
"With activity growing at this pace, we are entering into rate hike territory here," Mr Williamson said.
By contrast, the lacklustre eurozone data could make it less likely that the European Central Bank will raise interest rates from the current historic low of two per cent soon.
The eurozone manufacturing PMI, released on Friday, slipped to a four-month low in March.
"We think growth this year and next will be at 1.5 per cent... Today's data really confirms that - it's not going anywhere," said James Carrick at ABN AMRO.
Mr Williamson said that the eurozone PMI surveys implied quarterly GDP growth of 0.4 per cent in the eurozone in the first three months of the year, but he said there was a distinct loss of momentum towards the end of the quarter.
"The indications are that if we remain on this trajectory, the second quarter will be weaker than the first," he said.
Despite the slowdown in new business growth, eurozone companies were optimistic about the future, hoping that warmer weather in the spring would lead to more activity.
The business expectations index rose to 67.5 - its highest level since February 2004 - from 64.3 the previous month. The outlook improved in all the top three eurozone economies - Germany, France and Italy.
Expectations of better things to come meant that companies were also happier about taking on more staff. The employment index edged up 51.0, its highest level in almost three years.
Of the individual eurozone countries, growth picked up a notch in Germany and Italy but slowed in France.
"What's encouraging is that previous laggards, Italy and Germany, have recovered quite well," said Adolf Rosenstock at Nomura.
The input prices index slipped to an 11-month low of 57.7, despite the fact that crude oil prices rose above $55 a barrel for the first time in March. The strong euro has limited the impact from rises in dollar-denominated energy prices.