The U.S. services sector expanded in March although the non-manufacturing business activity composite index was 55.2 in the month, compared to 57.6 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 Thomson Reuters had expected a 57.0 level.

The prices paid index slipped to 53.5 from 57.7.

The employment index dropped to 51.6 from 55.2.

The business activity/production index fell to 58.9 from 63.6, the new orders index was at 58.9, off from 61.2; backlog of orders dipped to 53.0 from 54.0; new export orders jumped to 62.5 from 57.0; inventories declined to 48.5 from 52.0; inventory sentiment gained to 65.0 from 64.5; the supplier deliveries index grew to 51.5 from 50.5; and imports increased to 56.5 from 51.0.

Members' general comments on business in the month included:

  • "Growth on [a] number of projects has slowed a little, but revenue projections are steady." (Construction)
  • "The details of the revisions to the Obamacare program are of great interest to us. There is a large amount of future uncertainty with what will happen. Meanwhile, the business continues." (Finance & Insurance)
  • "Health care changes can affect our business. Uncertainty is making us hold on many projects." (Health Care & Social Assistance)
  • "Market conditions are still favorable with animal proteins due to [the] strong dollar, low exports and [an] abundant supply. Unknown [are] the POTUS' policies going forward on trade and immigration. Worker shortages have become a real problem in food production and produce growing areas." (Accommodation & Food Services)
  • "Business is picking up. Service labor is tight. New legislation has had significant impact." (Public Administration)
  • "Overall, business conditions are favorable, and the outlook is positive." (Retail Trade)
  • "Continued optimism regarding the domestic business environment." (Management of Companies & Support Services)
  • "First quarter has been brisk, and March has been as busy as I [have] ever seen, with many new endeavors." (Utilities)


Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.
Gary Siegel

Gary Siegel

Gary Siegel has been at The Bond Buyer since 1989, currently covering economic indicators and the Federal Reserve system.