Service sector growth slips in March

The service sector expanded at a slightly slower pace in March but provided a flicker of hope that the economy is strengthening amid a slowdown so far this year.

{mosads}Growth fell to 56.5 percent last month, down from 56.9 percent in February, the Institute for Supply Management said Monday.

Any readings above 50 percent signal expansion.

Despite a slip in sales that weighed on the overall expansion, new orders and hiring each improved last month, a sign that a rebound may be in the offing over the next few months.

New orders rose to 57.8 percent last month up from 56.7 percent in February. Hiring ticked up slightly to 56.6 percent in March, the 13th-straight month of growth, from 56.4 percent the previous month.

Concerns about the economy’s health were revived on Friday when the March jobs report came in well below expectations.

Employers added only 126,000 jobs, breaking a yearlong streak of at least 200,000 a month.

Economists forecast that the economy will grow at only a 1 percent pace in the first three months of the year, held back primarily by bleak winter weather.

But expectations are for another spring rebound and solid growth through the rest of the year.

Comments from survey respondents reflected that optimism. One in the healthcare industry said: “Business remains strong this month.” 

Another in wholesale trade said that: “Overall business is continuing to expand for 2015.”

The index is a survey of a wide variety of businesses — the service sector employs 90 percent of all workers, including those at restaurants, hotels and retailers.