The service sector expanded in March for the 16th consecutive month, but the pace of growth was slowed than February, which was the fastest in the last five years. A private trade group, the Institute for Supply Management, today said that its index of service-sector activity dropped to 57.3 percent last month.
It was 59.7 percent in February. According to the group the decline in March was the first decline in seven month, but there is nothing to worry about as any reading above 50 percent indicates expansion.
The growth in service sector is an important indicator about the health of the economy as it employs about 90 percent of the work force in the United States. The service sector is made up of a range of industries that include retail, health care, financial services and construction. In November 2008, the index plummeted to 37.6 percent. It was the time when the financial crisis was at its height.
The group added that several companies participated in the survey and many of them were worried about rising fuel prices and the impact of Japan’s earthquake and subsequent tsunami on the supply of computer equipment and other goods. But the measure of prices paid actually dipped in March. “Over all, most respondents remain confident about the direction of the economy,” Anthony Nieves, who oversees the survey for the trade group, was quoted as saying by the New York Times. A measure of new orders came down slightly in March and an employment index also dropped.
