US service sector bounces back as growth levels improve
After sinking to a three-year low in September, last month saw improved growth
Businesses operating in the large US service sector are starting to see improved growth, according to the latest figures from the Institute for Supply Management (ISM).
After sinking to a three-year low in September, figures for last month showed companies grew at a faster pace. The service sector accounts for more than two-thirds of US economic activity.
The ISM index published today grew to 54.7, from 52.6 in September. Any figure above 50 indicates growth, so this latest data indicates growth is accelerating. It was also higher than expectations of 53.5 according to a Reuters survey.
That economic activity in the services expanded at a more robust pace than expected, shows that the weakness suffered in the industrial sector stemming from the US-China trade war has not spread.
Data released by the ISM last week gauging the performance of the manufacturing sector, stood at 48.3 per cent in October, indicating contraction of US manufacturing activities for the third month in a row.
"The non-manufacturing sector had an uptick in growth after reflecting a pullback in September," said Anthony Nieves, chair of ISM's non-manufacturing business survey committee. "The respondents continue to be concerned about tariffs, labour resources and the geopolitical climate.”