The U.S. service sector shrank again in March, but not by as much as the previous month, the Institute for Supply Management (ISM) said in a report Thursday that showed increasing concern about soaring prices for raw materials. The ISM non-manufacturing index rose slightly to 49.6 last month, up from 49.3 in February. A reading below 50 indicates contraction in the massive service sector, while a reading above 50 indicates growth. The service sector represents about 80 percent of U.S. activity, including businesses like banks, airlines, hotels, and restaurants. March was the third consecutive month of contraction, but its reading was stronger than what analysts had expected. Purchasing managers surveyed by ISM said they were especially concerned about the rising prices of raw materials. ISM survey chairman Anthony Nieves said members' comments “reflect concern about rising fuel and energy costs and the impact they are having on commodity prices.” The price index jumped to 70.8 in March from 67.9 the previous month. New orders and export orders rose, but employment fell.
