NEW YORK – The U.S. services sector expanded at a slower pace in March as the non-manufacturing business activity composite index was 57.3 in March, compared to 59.7 in February, on a seasonally adjusted basis, the Institute for Supply Management reported Tuesday.
Economists polled by Thomson Reuters had expected a 59.8 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, dipped to 72.1 from 73.3.
The employment index decreased to 53.7 from 55.6.
The business activity/production index fell to 59.7 from 66.9, the new orders index was at 64.1, off from 64.4; backlog of orders gained to 56.0 from 52.0; new export orders increased to 59.0 from 56.5; inventories stayed at 55.5; inventory sentiment grew to 67.0 from 57.5; the supplier deliveries index fell to 51.5 from 52.0; and imports declined 50.0 from 53.5.
Members' general comments on business in the month included:
“Business is steady. Very concerned about high fuel costs and the speed of any Japanese recovery.” (Agriculture, Forestry, Fishing & Hunting)
“Housing market still slow getting started. Freight costs going higher. Prices moving up.” (Wholesale Trade)
“Business activities remain about the same, but the increase in fuel costs has made both a direct and indirect impact.” (Public Administration)
“Occupancy continues to increase compared to last year by about 3 percent.” (Accommodation & Food Services)
“The catastrophe in Japan is severely affecting supply chains for magnetic media.” (Management of Companies & Support Services)
“General state of business has improved slightly over the prior month. There seems to be an increase in qualified customers.” (Construction)
