ISM Services Index Shows Contraction in March
The U.S. services economy joined the factory sector in a contraction, according to a report by the Institute for Supply Management released Thursday.ISM said Thursday that its index for retail, financial services, construction and other non-manufacturing businesses fell to 47.9 during March from 53.9 the previous month. ISM reports below 50 indicate business retrenchment.
The services index, as the report is more commonly called, was released just one day after the group’s factory index showed that manufacturing activity in the United States contracted for the first time in five months.
The contraction in the services sector was the first in 15 months. The last contraction prior to March was a 49.5 reading in January 2002.
The group’s prices paid index read 62.0 is the highest since the 62.1 figure reported in December 2000. The index was pushed higher by increases in the prices of “#2 diesel fuel, energy, freight, fuel, fuel oil, fuel surcharges, gasoline, HDPE,
2 heating fuel, isopropanol, natural gas, oil, paper, petroleum-based products and petroleum products,” according to the report.
Analysts told Bloomberg that the businesses in the service economy “are caught up in the same funk affecting everyone else.”
War fears and rising energy costs have hurt the U.S. economy in recent months.
The trucking industry is one part of the services economy.
