US Services Sector Activity Edges Up In August

Text size

Activity in the key US services sector rose for a second straight month, helped by growth in new orders, according to survey data released Thursday.

The Institute for Supply Management’s (ISM) services index crept up to 51.5 percent last month from 51.4 percent in July — in a sign that the sector continues to expand.

The figure was slightly above a consensus estimate by analysts.

The increase in overall activity was helped by directly factoring indexes such as business activity, new orders and employment, said ISM survey chair Steve Miller.

But he added: “Slow-to-moderate growth was cited across many industries, while ongoing high costs and interest-rate pressures were often mentioned as negatively impacting business performance and driving softness in sales and traffic.”

Among segments, the new orders index picked up from 52.4 percent to 53.0 percent, while the business activity index edged down slightly to 53.3 percent.

The employment index ticked down too from 51.1 percent to 50.2 percent in August, said the ISM report.

But even with deceleration, these figures still stand above the 50-point threshold separating growth from contraction.

“Generally, business is good. However, there are concerns of slowing foot traffic at restaurants and other venues,” said a survey respondent in agriculture and forestry.

A respondent in the construction sector added that higher borrowing costs continue to weigh on the housing market, noting: “All segments of the industry are affected.”

bys/des