U.S. service sector expands slightly

The overall service sector reports growth in April, but the transportation/warehousing industry does not

Staff -- Logistics Management, 5/6/2008

The U.S. service sector expanded slightly in April after three months of contraction, according to a report issued yesterday by the Institute of Supply Management (ISM).

The ISM’s non-manufacturing index (NMI) increased 2.4 percentage points to 52%. (An NMI of more than 50 represents expansion of the service sector, while a reading under 50 represents contraction.)

Twelve service industries reported growth in April, while six industries reported contraction. Among those six was the transportation/warehousing industry, which, in addition to reporting an overall decrease in economic activity, also reported decreases in employment and increases in prices paid for materials and services.

Rising prices were a concern for all service industries in April. The ISM reported last week that high commodity prices were also a concern for manufacturers.