Oct. 7, 2004--While service industries continue to show growth, the rate of growth in September fell to its lowest level in over a year, according to a new survey.
The Institute for Supply Management reported yesterday that its monthly Business Activity Index of service industries slipped to 56.7, down from an August reading of 58.2 The report indicates that business activity in the non-manufacturing sector continued to increase in September, the 18th consecutive month of overall growth. But the rate of growth in September dropped to the lowest level recorded since May 2003.
The survey showed slower growth rates in most of the other areas it gauges. The measurement of increases in new orders slipped slightly to 58.6 from 58.5 in August, and inventory growth fell to 51.5 from 53.0 in August. Price increases slowed from 70.0 to 67.1 in September, while import growth plunged to 56.0 from 63.5 the previous month.
These slowdowns were partially offset by more rapid increases in a handful of other areas. The report's employment index rose to 54.6 from 52.5 the month before, and the measurement of new export orders edged up to 55.5 from 55.0 in August.
The survey suggested continued positive feelings about general business conditions but cited specific concerns including slowing growth rates, inflationary pressures, transportation shortfalls, and high fuel and energy costs. The survey also noted concerns about significant business drop-offs in areas including Florida due to the recent hurricanes.
The index is based on a monthly survey of 450 purchasing and supply executives, with all readings above 50.0 indicating overall growth.