The Institute for Supply Management’s non-manufacturing business activity composite index was 51.7 in May, down from 52.0 in April, on a seasonally adjusted basis, the group said yesterday.

Economists polled by IFR Markets had expected a 51.0 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, rose to 77.0 from 72.1. The employment index decreased to 48.7 from 50.8.

The business activity index grew to 53.6 from 50.9, the new orders index rose to 53.6 from 50.1, backlog of orders slid to 49.0 from 50.0, new export orders rose to 54.0 from 48.5, inventories increased to 54.0 from 47.0, inventory sentiment grew to 66.5 from 63.0, the supplier deliveries index slipped to 51.0 from 56.0 last month, and imports fell to 48.0 from 50.0.

Members’ comments from specific sectors on business in the month included:

“Business activity for the last month has increased slightly over the previous month.” (Professional, Scientific, and Technical Services.)

“High energy prices hurting the cost and sell side of our business.” (Agriculture, Forestry, Fishing, and Hunting.)

“Economic and market conditions continue to weigh down financial services industry in general. Spending and employment growth are on hold until overall market conditions show improvement.” (Finance and Insurance.)

“The economy continues to be pressured by high fuel costs and food costs in general. The consumer seems to approach spending with trepidation given all the uncertainty in the markets.” (Accommodation and Food Services.)

“Business is picking up.” (Retail Trade.)

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