The nation's services industries, which include such businesses as retail and finance, saw a mild improvement in business conditions in the last month of 2008, industry data showed Friday, though they continued to suffer a contraction as customers cut back spending and credit conditions remained tight.
Prices fell at a faster pace in December, the report showed, while employment dropped for the eighth consecutive month. The survey followed close on the heels of a similar report about the manufacturing industry, which gave one of the worst readings for conditions in the nation's factory sector in decades.
An industry group known as the Institute for Supply Management said that its index of non-manufacturing activity came in at 40.6 for December, up from the 37.3 recorded for the previous month.
The result still indicated that the country's services businesses contracted during the month, with any index reading below 50 pointing to shrinking activity in the sector. Still, the rate of decline slowed for December, possibly a hopeful sign for those looking for a bottom for the economic downturn.
Only one industry showed growth during the month, according to the ISM report, with 17 reporting contraction. Retail trade was the lone source of growth in December.
Wholesale trade experienced the sharpest contraction during the month, the report indicated, with mining and professional, scientific and technical services among the other notable sources of weakness.
The tick up in the ISM index came amid improvement in production and new orders, though both continued to show contraction during the month. The ISM production index rose 6.6 points to 39.6 in December, while the new orders index climbed to 39.9 from 35.4 in the previous month.
Prices continued to fall during the period, with the decline coming at a faster rate in December. The ISM prices index fell to 36.0 from a reading of 36.6 in November.
Employment, a key factor for general economic growth, dropped again for the services industries in December, though the decline was at a slower rate. The ISM employment index rose to 34.7 from 31.3 in the previous month.
This is the eighth consecutive month of contraction for services employment, the ISM report indicated. Later this week, the government will announce its employment statistics for December, with economists predicting yet another set of job losses for the month.
Last week, the ISM released a similar report about the manufacturing sector, which showed that the nation's factories experienced a sharper contraction in December. The ISM manufacturing index dropped to 32.4 from a mark in November of 36.2.
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