ISM: US services sector slowed by weather in February

The US services sector expanded at its slowest pace in three years in February, with harsh winter storms blamed in part, the Institute for Supply Management said Wednesday. The ISM purchasing managers index for the services industry fell to 51.6 from 54.0 in January, putting it only narrowly above the 50.0 threshold between expansion and contraction. It was the lowest level for the index since February 2010, and well below the 54.3 average for the past 12 months. Business activity slowed, and employment contracted in the sector. Prices continued to increase but at a slower pace, and in a positive sign, the new orders component sped up slightly, to 51.3 from 50.9. Survey respondents in construction and wholesale trade cited the severe weather of the month for the softness in activity. "Winter weather is slowing down our projects," said one construction sector respondent, predicting a pickup in April. But others referred to general economic sluggishness. "Economy still plugging along, but at a very slow rate of growth," said a respondent from the professional, scientific and technical services industry.