ISM Non-Manufacturing Index Gains to 55.7 in April from 54.5 in March

The U.S. services sector expanded at a faster pace in April as the non-manufacturing business activity composite index was 55.7 in the month, compared to 54.5 in March, on a seasonally adjusted basis, the Institute for Supply Management reported Wednesday.

An index reading below 50 signals a slowing economy, while a level above 50 suggests expansion.

Economists polled by Thomson Reuters had expected a 54.7 level.

The prices paid index increased to 53.4 from 49.1.

The employment index grew to 53.0 from 50.3.

The business activity/production index fell to 58.8 from 59.8, the new orders index was at 59.9, up from 56.7; backlog of orders dipped to 51.5 from 52.0; new export orders decreased to 56.5 from 58.5; inventories rose to 54.0 from 52.5; inventory sentiment declined to 61.0 from 62.5; the supplier deliveries index held at 51.0; and imports increased to 54.0 from 53.0.

Members' general comments on business in the month included:

“Severe non-skilled labor shortage is hurting the construction industry.” (Construction)

“Business is holding steady, revenue is almost as anticipated and costs are lower which is helping to maintain current profitability.” (Finance & Insurance)

“We expect our business condition to improve in Q2 as compared to Q1. Typically, Q1 is our slowest period and business activity picks up later through the year.” (Health Care & Social Assistance)

“Very favorable cost conditions all around.” (Accommodation & Food Services)

“In higher education we are gearing up for the summer conference season. This impacts (increases) the spend in our service category and drives income from many campuses.” (Educational Services)

“Recent upturn in oil prices is creating a slightly more positive outlook for those in the energy industry, but has not been enough to initiate hiring or spending.” (Professional, Scientific & Technical Services)

“Business is still improving. Trucking has tightened due to produce hauling season.” (Wholesale Trade)

“Heading into a slower season, but cautious optimism of modest gains from same period last year.” (Retail Trade)

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