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Non-Manufacturing Activity Grows, But More Slowly

By John S. McClenahen In contrast to the contraction in U.S. manufacturing activity in October, the non-manufacturing sector of the U.S. economy expanded for the ninth consecutive month in October, although slightly slower than in September. The index of non-manufacturing business activity compiled by the Tempe, Ariz.-based Institute for Supply Management (ISM) for last month was 53.1%, down eight-tenths of a percentage point from the 53.9% recorded for September. As with its manufacturing index, a figure above 50% on ISM's non-manufacturing scale indicates that business in the sector generally is increasing; a mark below 50% suggests it is contracting. Some 26% of ISM members reported increased business in October, down from 32% in September, while 21% saw business actually decline, a higher figure than September's 19%. In October, no change in business was reported by 53% of those surveyed, up from 49% in September. "The smaller number of respondents reporting increased activity and larger numbers reporting reduced activity reflects the slower rate of growth experienced by ISM members overall in October," the association notes.

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