The U.S. services sector expanded at a slower pace in November as the non-manufacturing business activity composite index was 55.9 in the month, compared to 56.9 in October, on a seasonally adjusted basis, the Institute for Supply Management reported Thursday.
An index reading below 50 signals a slowing economy, while a level above 50 suggests expansion.
The prices paid index increased to 50.3 from 49.1.
The employment index slid to 55.0 from 59.2.
The business activity/production index dropped to 58.2 from 63.0, the new orders index was at 57.5, down from 62.0; backlog of orders fell to 51.5 from 54.5; new export orders declined to 49.5 from 54.5; inventories gained to 54.5 from 52.5; inventory sentiment rose to 63.5 from 63.0; the supplier deliveries index climbed to 53.0 from 52.0; and imports decreased to 51.0 from 54.5.
Members' general comments on business in the month included:
- "Customers' outlook on their revenues is softening." (Management of Companies & Support Services)
- "Moderate activity level. Some suppliers are providing longer lead times due to their own increased backlog." (Professional, Scientific & Technical Services)
- "Conditions are holding steady for a profitable year and 4th quarter." (Finance & Insurance)
- "Affordable Care Act impacting our business, reducing revenue while increasing cost of care. Several states consolidating medical/behavioral providers which have impacted existing business negatively." (Health Care & Social Assistance)
- "Overall food [cost of goods sold] (COGS) has remained generally lower throughout 2015 due to strong dollar, less exports to other countries and low corn prices." (Accommodation & Food Services)
- "Continuing competitive pressure in the grocery retail industry has led to implementation of lower prices across all markets and increased focus and efforts from the organization to reduce cost of goods [sold]." (Retail Trade)
- "Q4 retail expectations high, and prep for December peak volumes up in all aspects of staffing, inventory build, and supply purchasing." (Transportation & Warehousing)
- "Year-over-year sales for the same month are down 3 percent." (Wholesale Trade)
