The U.S. services sector expanded at a slightly faster pace in February as the non-manufacturing business activity composite index was 56.0 in the month, compared to 55.2 in January, on a seasonally adjusted basis, the Institute for Supply Management reported Tuesday.

Economists polled by Thomson Reuters had expected a 55.0 level.

An index reading below 50 signals a slowing economy, while a level above 50 suggests expansion.

The prices paid index rose to 61.7 from 58.0.

The employment index decreased to 57.2 from 57.5.

The business activity/production index grew to 56.9 from 56.4, the new orders index was at 58.2, up from 54.4; backlog of orders increased to 54.5 from 49.0; new export orders gained to 60.5 from 55.5; inventories climbed to 54.0 from 47.0; inventory sentiment slid to 62.5 from 64.0; the supplier deliveries index dipped to 51.5 from 52.5; and imports jumped to 52.5 from 51.0.

Members' general comments on business in the month included:

"Our business is beginning to turn up slightly." (Health Care & Social Assistance)

"Business seems to be improving; RFQ volume and orders also up." (Management of Companies & Support Services)

"Continuing to see slight uptrend in activity, primarily related to 1st quarter initiatives started." (Finance & Insurance)

"Construction market showing some positive signs." (Real Estate, Rental & Leasing)

"The economy continues to slowly pick up, perhaps at an even faster pace than had been previously projected. New housing permits and business licenses are at a multiyear high, although still lower than pre-recession." (Public Administration)

"February bouncing back to forecast levels, which was 11 percent over 2012." (Wholesale Trade)

"Business is picking up; more projects to bid and things are improving." (Construction)

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