The U.S. services sector expanded at a slower pace in May as the non-manufacturing business activity composite index was 55.7 in the month, compared to 57.8 in April, on a seasonally adjusted basis, the Institute for Supply Management reported Wednesday.
Economists polled by Thomson Reuters had expected a 57.0 level.
An index reading below 50 signals a slowing economy, while a level above 50 suggests expansion.
The prices paid index climbed to 55.9 from 50.1.
The employment index slid to 55.3 from 56.7.
The business activity/production index dipped to 59.5 from 61.6, the new orders index was at 57.9, down from 59.2; backlog of orders fell to 48.5 from 54.5; new export orders gained to 55.0 from 48.5; inventories remained at 51.0; inventory sentiment fell to 59.0 from 59.5; the supplier deliveries index slid to 50.0 from 53.5; and imports rose to 53.5 from 51.5.
Members' general comments on business in the month included:
"Avian influenza is causing major issues within the poultry industry. Uncertainty has caused us to adopt a 'hand-to-mouth' procurement strategy." (Agriculture, Forestry, Fishing & Hunting)
"In most regions, the construction business is picking-up. Weather conditions have helped with this pick-up." (Construction)
"Generally everything remains the same, slight increase towards offshore alternatives starting to pick up speed." (Finance & Insurance)
"Moderate recovery continues with all signs pointing to rebound in the fourth quarter." (Educational Services)
"Current level of new orders is still flat. Expecting uptick in the near future." (Professional, Scientific & Technical Services)
"Increased retail sales; stronger housing market; increased employment." (Public Administration)
"Business steady, little or no change. Annual year-over-year growth approximately three percent." (Retail Trade)
"As expendable income continues to be available [due to] lower gas prices, our business continues to increase. The port congestion is hampering deliveries and is keeping inventories at a lower level than desired on imports." (Wholesale Trade)
