The Institute for Supply Management’s non-manufacturing business activity composite index climbed to a seasonally adjusted 53.2 in September from 51.5 in August, the group said Tuesday.
Economists expected a 51.5 level. Readings below 50 signal economic contraction. Levels above 50 signal growth.
The prices paid component index, closely watched for signs of inflation, slid to 60.1 in September from 60.3. Employment rose to 50.2 from 48.2 in August.
The business activity-production index fell to 52.8 from 54.4, new orders rose to 54.9 from 52.4, backlog of orders slipped to 48.0 from 50.5, new export orders rose to 58.0 from 46.5, inventories decreased to 47.0 from 53.5, inventory sentiment slipped to 59.5 from 60.0, supplier deliveries grew to 55.0 from 51.0, and imports increased to 53.0 from 50.5.
Steven Wood, chief economist at Insight Economics, said business activity in the services, construction, and government sectors “fell off a cliff” in October 2008 and continued to fall through August 2009. There was little change between August 2009 and January 2010, he said.
“Non-manufacturing activity has expanded over the past nine months [but] is off of its best pace of the year despite this month’s acceleration,” Wood said in a research note. “A modest cyclical upswing is currently in place.”
