By John S. McClenahen Like the manufacturing sector, the non-manufacturing sector of the U.S. economy expanded again in January. But unlike manufacturing, which grew at a slower pace in January than in December 2002, the service sector of the economy added a third of a percentage point to its rate of expansion last month, reports the Tempe, Ariz.-based Institute for Supply Management (ISM). ISM's non-manufacturing activity index was 54.5% in January, compared with 54.2% in December. A figure above 50% indicates that the service sector of the economy generally is expanding; below 50%, it signals contraction. "In January, non-manufacturing business activity increased for the 12th consecutive month," notes Ralph G. Kauffman, chairperson of ISM's non-manufacturing business survey committee and coordinator of the purchasing and supply management program at the University of Houston-Downtown. "Also in January, new orders grew at a faster rate than in December and, after four consecutive months of increases the backlog of orders index indicated reduced order backlogs in January." Significantly, an "all economy" index that UBS Warburg constructs from ISM's manufacturing and non-manufacturing indexes rose to 53.1% in January from 52.3% in December. This reaffirms "that the U.S. economy is still growing, war fears or not," says Maury Harris, chief U.S. economist at UBS Warburg.