Unlike the manufacturing sector of the U.S. economy, which saw its growth rate slow in March of this year, the non-manufacturing sector picked up speed. The Institute for Supply Management's (ISM) business activity index for non-manufacturing was 60.5% last month, four-tenths of a percentage point higher than February's 60.1% mark. A figure above 50% indicates the non-manufacturing sector is growing; a figure below 50% signals that it is contracting.
Non-manufacturing activity was stronger than many economists expected; the consensus forecast was for a slight decrease to 59.0% in March.
The major strength was in new orders, with that segment of the overall index gaining 3.3 percentage points to 59.5%.
The non-manufacturing sector includes such industries as utilities, mining, finance and banking, business services and construction. Thirteen of the 17 non-manufacturing industries included in the index reported increased activity in March, up from 10 reporting increased activity in February, noted Ralph G. Kauffman, chair of ISM's non-manufacturing business survey committee and coordinator of the supply chain management program at the University of Houston-Downtown. "While price increases are still a topic of concern . . . they are not mentioned as often as in past months," he also noted.
