U.S. Service Industries Unexpectedly Contracts in November

After two consecutive months of expansion U.S. service industries unexpectedly contracted in November. The Institute for Supply Management said Thursday its non-manufacturing index declined last month to 48.7% after printing 50.6% in October. That’s well below the reading of 51.5% analysts had been expecting and signals contraction in the industry (a reading above 50% typically indicates growth, while a showing below the threshold suggests contraction).

Seven industries reported increased business activity, and 10 industries reported decreased activity for the month of November.

The index of non- manufacturing businesses, which makes up almost 90% of the economy and derives from a survey of purchasing managers at some 370 co.’s, reflects lost of confidence in the economy’s ability to recover.



  • “Capital markets remain very tight; lenders are not releasing funds for development projects, limiting expansion.” (Accommodation & Food Services)
  • “Fourth quarter still looking grim, but potential upturn for Q1 2010.” (Professional, Scientific & Technical Services)
  • “No one trusts that the recovery is real. Seems everything and everyone is in a holding pattern.” (Public Administration)
  • “Business is still flat.” (Wholesale Trade)
  • “U.S. business remains better than 2007 levels, although it’s been through personnel and cost reductions that we are now profitable. Business continues to be about 8 percent below 2008 levels.” (Real Estate, Rental & Leasing)

Tables: ISM

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