NEW YORK - The Institute for Supply Management's non-manufacturing business activity composite index was 53.0 in February, up from 50.5 in January, on a seasonally adjusted basis, the group said today.
Economists polled by Thomson Reuters 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, slid to 60.4 from 61.2.
The employment index increased to 48.6 from 44.6.
The business activity/production index rose to 54.8 from 52.2, the new orders index was at 55.0, up from 54.7; backlog of orders gained to 46.0 from 45.5; new export orders increased at 47.0 from 46.0; inventories decreased to 45.0 from 46.5; inventory sentiment slipped to 60.0 from 64.5; the supplier deliveries index rose at 53.5 from 50.5; and imports climbed to 48.5 from 47.0.
“The NMI (Non-Manufacturing Index) registered 53 percent in February, 2.5 percentage points higher than the seasonally adjusted 50.5 percent registered in January, indicating growth in the non-manufacturing sector,” said Anthony Nieves, chair of the ISM's Non-Manufacturing Business Survey Committee. “The Non-Manufacturing Business Activity Index increased 2.6 percentage points to 54.8 percent, reflecting growth for the third consecutive month. The New Orders Index increased 0.3 percentage point to 55 percent, and the Employment Index increased 4 percentage points to 48.6 percent. The Prices Index decreased 0.8 percentage point to 60.4 percent in February, indicating an increase in prices paid from January. According to the NMI, nine non-manufacturing industries reported growth in February. Respondents' comments vary by industry and company about business conditions.”
Members' general comments on business in the month included:
"Conditions for our business have substantially improved over the last three months." (Information)
"We are proceeding with caution based upon the current market conditions." (Public Administration)
"Business activity about the same as last month. Perhaps a slight increase in new orders for material and services — nothing major." (Utilities)
"The overall unemployment and the net effect of housing [instability] continue to affect our business." (Retail Trade)
"Business is okay. Customers are doing a lot of price shopping." (Agriculture, Forestry, Fishing & Hunting)
