Service sector rebounds slightly

Key measure of non-manufacturing business activity shows signs of recovery but not growth.

EMAIL  |   PRINT  |   SHARE  |   RSS
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all RSS FEEDS (close)
By Ben Rooney, staff writer

Are you in favor of universal health care?
  • Yes
  • No

NEW YORK ( -- A key index of business activity in the nation's services industry rose unexpectedly in March, but the indicator remained below the level that shows growth in the sector.

The Institute of Supply Management's March report on businesses outside of the manufacturing sector rose to an index reading of 49.6 from 49.3 in February, the ISM announced Thursday. Economists were expecting a reading of 48.5, according to a consensus compiled by

A reading above 50 indicates growth in the sector, and a reading below 50 represents an industry-wide decline.

Thursday's report marks the third consecutive month that the index has been below the tipping point.

The ISM's overall measure averages data from four key areas of the service sector: business activity, new orders, employment and supplier deliveries.

The business activity component rose 1.4 points to 52.2 in March, the second consecutive month of growth. The new orders index increased modestly while employment and deliverers both fell.

Meanwhile, the part of the index that gauges prices paid by businesses in the service sector for materials and services rose nearly 3 points to 70.8 in March.

Rapidly rising costs are now a growing concern for the service sector, according to Anthony Nieves, chair of the ISM's Non-Manufacturing Business Survey Committee.

"Members' comments in March are mixed and reflect concern about rising fuel and energy costs and the impact they are having on commodity prices," Nieves said in a statement.

In December, the overall index registered a healthy 53.2. But it fell sharply in January to 44.6, the largest month-to-month drop in the index's 10-year plus history.

The service sector, which includes everything from retailers and health care providers to airlines and utilities, represents the majority of the nation's economic activity.

Earlier this week, the ISM reported that business activity in the manufacturing sector recovered slightly, though the measure remained below the level that shows growth.  To top of page

They're hiring!These Fortune 100 employers have at least 350 openings each. What are they looking for in a new hire? More
If the Fortune 500 were a country...It would be the world's second-biggest economy. See how big companies' sales stack up against GDP over the past decade. More
Sponsored By:
10 of the most luxurious airline amenity kits When it comes to in-flight pampering, the amenity kits offered by these 10 airlines are the ultimate in luxury More
7 startups that want to improve your mental health From a text therapy platform to apps that push you reminders to breathe, these self-care startups offer help on a daily basis or in times of need. More
5 radical technologies that will change how you get to work From Uber's flying cars to the Hyperloop, these are some of the neatest transportation concepts in the works today. More