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Service industry picks up, but experts remain uncertain about future

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(Read caption) This chart shows service-related business activity continuing to expand through May, moving from April's index of 53.1 to an index of 53.7. The business activity index climbed to 56.5, showing a 2.73 percent increase from the level reported a year earlier.

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Today, the Institute for Supply Management released their latest Non-Manufacturing Report on Business indicating that service related business activity continued to expand in May with the overall non-manufacturing index climbing to 53.7 from last months reading of 53.1.

At 56.5, the business activity index improved since last month climbing 2.73% above the level seen a year earlier. 

This month, service industry respondents are sounding mixed to flat with some respondents citing improving activity but also uncertainty and lingering weakness:

"Sales remain slightly higher than the same period last year, but still below pre-recession sales figures." (Public Administration)

"The job order market slowed in April/May. We saw a slight increase in employment due to working down the order/inquiry backlog." (Professional, Scientific & Technical Services) 

"Business seems to be improving through the second half of the year." (Information) 

"Fairly stable the last month; overall optimistic going forward." (Accommodation & Food Services)

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"The flat sequential sales — which began in January 2012 — are still continuing. At this point, we do not predict any lift in the foreseeable future. We do not see any negatives; it appears that business has reached its 'cruising altitude' and is staying there." (Wholesale Trade)

"Healthcare reform and sequestration are having a strong negative impact on business." (Health Care & Social Assistance)

"North America continues to improve at a modest rate. Europe is still a problem for global recovery." (Mining)


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