U.S. service companies grew at a slower pace in March, as business activity and new orders slipped from strong levels in February.
The Institute for Supply Management, an association of purchasing managers, reports that its service index fell to 56.1 per cent last month, down from 59.7 per cent in February. Any reading above 50 signals growth. The service sector, which is where most Americans work, has been expanding for 110 straight months, according to the survey-based ISM index. March’s results indicate that growth should continue, although it might be somewhat slower than previous ISM reports suggested.“We had such a strong report last month, I didn’t know whether we could stay up in that high altitude – apparently not,” said Anthony Nieves, chair of the ISM non-manufacturing business survey committee.
Several companies surveyed for the index say it’s become more difficult to hire workers, a reflection of the 3.8 per cent unemployment rate. Steady hiring over the nearly decade-long recovery from the Great Recession has caused the pool of people seeking work to decline, helping to push up wages. Business activity and new orders fell sharply in March, as a greater percentage of companies indicated that both measures had fallen relative to February. But the measure of employment increased slightly as more of the companies surveyed said hiring was higher.
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