ISM: U.S. Services Sector Growth Slows in March
Economic activity in the non-manufacturing sector grew in March for the 27th consecutive month, according to the Institute for Supply Management’s (ISM) latest Report on Business Non-Manufacturing Index (NMI).
The NMI registered 56% in March, 1.3 percentage points lower than the 57.3% registered in February, indicating continued growth at a slower rate in the non-manufacturing sector, said Anthony Nieves, chair of the ISM Non-Manufacturing Business Survey Committee.
A reading above 50% indicates the non-manufacturing sector economy is generally expanding; below 50% indicates the non-manufacturing sector is generally contracting.
The Non-Manufacturing Business Activity Index registered 58.9%, which is 3.7 percentage points lower than the 62.6% reported in February, reflecting growth for the 32nd consecutive month. The New Orders Index decreased by 2.4 percentage points to 58.8%, and the Employment Index increased by 1 percentage point to 56.7%, indicating continued growth in employment at a slightly faster rate. The Prices Index decreased 4.5 percentage points to 63.9%, indicating prices increased at a slower rate in March when compared to February.
Respondents’ comments remain mostly optimistic about business conditions. They indicate that increased discretionary spending reflects the increased confidence level of businesses and consumers. There is continued concern about cost pressures and the instability of fuel prices.
The 16 non-manufacturing industries reporting growth in March – listed in order – are: Arts, Entertainment & Recreation; Management of Companies & Support Services; Accommodation & Food Services; Construction; Other Services; Wholesale Trade; Finance & Insurance; Information; Public Administration; Health Care & Social Assistance; Utilities; Real Estate, Rental & Leasing; Retail Trade; Educational Services; Professional, Scientific & Technical Services; and Transportation & Warehousing.
The two industries reporting contraction in March are: Mining; and Agriculture, Forestry, Fishing & Hunting.
To read the full ISM report, click here.