U.S. Services Sector Growth Continued in August

The U.S. services sector grew in August for the third month in a row, according to a survey of business executives.

The Institute for Supply Management’s index of activity in the services sector dipped to 56.9, 1.2 percentage poitns lower than the surprisingly strong July reading of 58.1.  This indicates growth in the services sector for the third straight month and the 125th time in the last 127 months, with the exception of April’s and May’s contraction.

Respondents’ comments are mostly optimistic and industry specific about business conditions and the economy as businesses are starting to reopen. Industries that have not reopened remain concerned about the ongoing uncertainty,” said Anthony Nieves, head of the survey.

Deliveries slowed in August due to an increase in customer demand, Nieves said. That is in contrast with delivery slowdowns earlier this year, which Nieves said were caused by coronavirus disruptions.

Fifteen of the 18 subsectors included in the index reported growth, led by arts, entertainment, and recreation. Three indicated contraction, led by mining.

“Our business activity is now thriving again, after modifications to our operations,” an executive from the food and accommodations sector said.