Service companies’ activity grew at a slower rate in March, a closely watched index shows, reflecting a generally sluggish economy in the first quarter. The Institute for Supply Management said Monday its non-manufacturing index slipped to 56.5 from 56.9 in February. A reading above 50 indicates the sector is expanding. Economists had estimated the index fell to 56.6.
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A gauge of production dipped to 57.5 from 59.4. But measures of new orders, which foreshadow future activity, rose to 57.8 from 56.7. And the employment index rose to 56.6 from 56.4. The solid reading of orders suggests the economy could pick up in coming months. Harsh weather likely delayed construction projects and other service sector activity.
Services make up about 80% of the economy. ISM’s manufacturing index has been more sluggish recently as a strong dollar has made U.S. goods more expensive for foreign buyers, hurting exports.
