Service sector activity continued to rise in May, according to the latest Markit/CIPS index.

The headline seasonally adjusted business activity index posted a reading of 55.4 in May, marginally up on April’s 55.3.

Growth was supported by rising levels of new business and enquiries, as well as product launches.

While the rate of growth weakened further from February’s two-and-a-half year peak, business for the sector remained relatively high, with over 50% of panelists forecasting a rise in activity from present levels in the next year.

Paul Smith, senior economist at Markit and author of the UK Services PMI, says: “On the surface, the headline index suggests that the dominant service sector expanded at a solid clip in May and remains on course to make a reasonable contribution to second quarter GDP.

“However, with weaker trends in new business and employment raise questions over the sector’s ability to maintain its current level of growth in the second-half of the year.”