The U.S. services sector expanded at a slower pace in March as the non-manufacturing index fell to 58.8 from 59.5 in February, 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 IFR Markets had expected a 59.0 level.
The prices paid index rose to 61.5 from 61.0, the 25th consecutive month prices rose, the ISM said. The employment index climbed to 56.6 from 55.0.
The business activity/production index fell to 60.2 from 62.8, the new orders index was at 59.5, down from 64.8; backlog of orders gained to 56.5 from 56.0; new export orders decreased to 58.0 from 59.5; inventories held at 53.5; inventory sentiment slid to 58.5 from 61.0; the supplier deliveries index grew to 58.5 from 55.5; and imports climbed to 55.0 from 50.0.
Members' general comments on business in the month included:
- "The unbelievable amount of market volatility in construction-related materials that started with lumber continues with the tariffs on steel and aluminum. Accurate, long-term planning has become incredibly difficult, as distributors that historically held costs for at least 30 days are now, in some cases, committing to only seven days, as prices can change drastically in that time." (Construction)
- "Interest rate hike [and] tariffs are likely to impact cost and price of goods and services." (Finance & Insurance)
- "Still feeling effects of plants in Puerto Rico being down, or not back to full capacity of IV solutions and plastic tubing sets." (Health Care & Social Assistance)
- "Business is stronger than forecast in March. Strategic sales continue to exceed forecast in March, as they have all quarter." (Management of Companies & Support Services)
- "Increased level of activity and pricing overall." (Mining)
- "As the first quarter end approaches, business outlook is steady, but not nearing growth forecast in Q4 2017." (Professional, Scientific & Technical Services)
- "Housing market [is] still strong, despite a shortage of construction workers." (Public Administration)
- "Q1 was positive, despite weather conditions that affected operations on the East Coast. The outlook remains positive going into Q2." (Transportation & Warehousing)
- "Overall, business has been slower than [the] previous quarter; however, we expect it to increase in the second quarter of 2018." (Wholesale Trade)