NEW YORK – The U.S. services sector expanded at a quicker pace in January as the non-manufacturing business activity composite index was 56.8 in the month, compared to 53.0 in December, on a seasonally adjusted basis, the Institute for Supply Management reported Friday.
Economists polled by Thomson Reuters had expected a 53.0 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, gained to 63.5 from 62.0.
The employment index increased to 57.4 from 49.8.
The business activity/production index rose to 59.5 from 55.9, the new orders index was at 59.4, up from 54.6; backlog of orders grew to 49.5 from 45.5; new export orders rose to 56.5 from 51.0; inventories slid to 47.0 from 48.5; inventory sentiment declined to 58.5 from 59.5; the supplier deliveries index dipped to 51.0 from 51.5; and imports increased to 55.0 from 54.0.
Members' general comments on business in the month included:
“Overall business conditions to improve. We continue to outperform previous business cycles.” (Information)
“We are seeing increased contractor bidding and activity in Q1 2012.” (Construction)
“Small business borrowing continues to be slow.” (Finance & Insurance)
“New fiscal year, new budgets — expecting to show an increase in sales in first quarter.” (Other Services)
“Economy continues to show signs of improvement and the company revenue is improving slightly, but is very susceptible to pricing and cost pressures.” (Professional, Scientific & Technical Services)
“There seems to be some stabilization in the economy as well as [in the] supply chain. This seems to be calming inventory and sales positions.” (Retail Trade)
“Business is still stable; however, inflation in food prices is still a problem.” (Wholesale Trade)
