U.S. Service-Sector Index Rises To 54.5% In March
Tuesday April 05, 2016 10:03
Editor‘s note: Updating earlier story with more details from report and comment from economist.
(Kitco News) - The Institute for Supply Management said Tuesday that its headline index for the service sector rose to 54.5% in March from 53.4% in February.
Consensus estimates compiled by news organizations called for the index to be somewhere around 54.0% to 54.5%.
Readings above 50% in such diffusion indexes are seen as a sign of economic growth, and vice-versa. The farther an indicator is above or below 50%, the greater or smaller the rate of change.
“This represents continued growth in the non-manufacturing sector at a slightly faster rate,” said Anthony Nieves, chair of the ISM non-manufacturing business survey committee.
The business activity index climbed to 59.8% from 57.8% in February, the 80th consecutive month reflecting growth, the report said. The new orders index rose to 56.7% from 55.5%, and the employment index climbed to 50.3% from 49.7%.
The index for prices climbed to 49.1% from 45.5%. However, with a below-50% reading, this means prices have contracted for the fifth time in the last seven months, ISM said.
“After seeing the manufacturing index (released Friday) move back into expansionary territory, the ISM’s non-manufacturing index’s gain wasn’t quite as intriguing. But good news is good news,” said Royce Mendes of CIBC Economics.
The 12 non-manufacturing industries reporting growth in March -- listed in order -- are educational services; information; wholesale trade; finance and insurance; health care and social assistance; retail trade; mining; management of companies and support services; accommodation and food services; public administration; utilities; and professional, scientific and technical services.
Two industries reported contraction in March -- arts, entertainment and recreation; and transportation and warehousing.
On Friday, ISM reported that the March manufacturing index climbed to 51.8% from 49.5% in February.
By Allen Sykora of Kitco News; firstname.lastname@example.org