Service industry picks up, but experts remain uncertain about future(Read article summary)
Service-related business activity expanded in May, climbing from an index of 53.1 the month prior to 53.7. While some industry leaders said they saw improved business, others said they are not optimistic the market is recovering.
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)
"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)