US services sector slows in December; still growing

US services sector slows in December; still growing

The US services sector has grown for 96 consecutive months. (Photo: AFP/Spencer Platt)
WASHINGTON: The key US services sector slowed in the final month of the year, but continues to show growth, according to a business survey released on Friday (Jan 5).After three very strong months, Institute for Supply Management said its monthly non-manufacturing index fell for the second consecutive month, dropping below the average for the past year, as new orders declined.The index fell 1.5 points to 55.9 per cent, lower than economists had expected. Any reading above 50 per cent indicates growth.Despite the decline, the sector has been growing for 96 consecutive months, and is a main driver of the US economy."Overall, the majority of respondents' comments indicate that they finished the year on a positive note," said Anthony Nieves, chair of ISM's Non-Manufacturing Business Survey Committee."They also indicate optimism for business conditions and the economic outlook going forward."
Only three of the industries surveyed - information, education, and company management - reported a contraction in December, while 14 reported growth.But the new orders index dropped 4.4 points to 54.3 per cent, as seven industries reported declines.Even so employment continued to grow, with the index up a point to 56.3 per cent and 12 industries reporting more hiring in the month.Companies in recent months have been reporting difficulty filling open positions, especially in skilled labor.
The price index was about flat at 60.8 per cent, as 13 industries reported price increases and none reporting declines.Among the comments from purchasing managers, the health care sector reported difficulty getting intravenous solutions and gauze. Medical products are a key industry in Puerto Rico which was ravaged by Hurricane Maria late last summer, disrupting supplies as much of the island still faces power outages.The Food and Drug Administration in November announced it was easing import rules for IV solutions and other products to help address the shortages, and is working with suppliers in Puerto Rico to get them back online.
Source: AFP/ec
 Source : http://www.channelnewsasia.com/news/business/us-services-sector-slows-in-december-still-growing-9837388