NEW YORK - The Institute for Supply Management's non-manufacturing business activity composite index was 50.6 in October, off from 50.9 in September, on a seasonally adjusted basis, the group said today.
Economists polled by Thomson Reuters had expected a 51.6 level.
An index reading below 50 signals a slowing economy, while a level above 50 suggests expansion.
The prices paid index, closely watched for signs of inflation, grew to 53.0 from 48.8.
The employment index decreased to 41.1 from 44.3.
The business activity index rose to 55.2 from 55.1, the new orders index was at 55.6, up from 54.2; backlog of orders surged to 53.5 from 51.5; new export orders increased to 53.5 from 48.5; inventories decreased to 43.0 from 47.4; inventory sentiment climbed to 63.5 from 62.0; the supplier deliveries index rose to 50.5 from 50.0, and imports slid to 46.0 from 51.5.
“NMI (Non-Manufacturing Index) registered 50.6 percent in October, 0.3 percentage point lower than the 50.9 percent registered in September, indicating growth in the non-manufacturing sector for the second consecutive month, but at a slightly slower rate,” said Anthony Nieves, chair of the ISM's Non-Manufacturing Business Survey Committee. “The Non-Manufacturing Business Activity Index increased 0.1 percentage point to 55.2 percent. This is the third consecutive month this index has reflected growth since September 2008. The New Orders Index increased 1.4 percentage points to 55.6 percent, and the Employment Index decreased 3.2 percentage points to 41.1 percent. The Prices Index increased 4.2 percentage points to 53 percent in October, indicating an increase in prices paid from September. According to the NMI, nine non-manufacturing industries reported growth in October. Respondents' comments remain mixed and are mostly cautious about business conditions and the overall economy.”
Members' general comments on business in the month included:
"General economic tone is still 'wait and see.' Capital outlays are postponed for durable goods." (Health Care & Social Assistance)
"Cost-cutting efforts continue." (Transportation & Warehousing)
"Overall business activity increasing — forecast even better market conditions in the coming months." (Construction)
"Business climate remains encouraging, but recovery will remain slow in rebounding." (Professional, Scientific & Technical Services)
"The weakening U.S. dollar contributing to upward pressure on commodity prices." (Wholesale Trade)
