A survey of service-oriented companies that employ most Americans showed steady if somewhat slower growth in the U.S. economy in March, but growing uncertainty about new government policies in Washington gnawed at some executives.
The Institute for Supply Management on Wednesday said its nonmanufacturing index fell 2.4 points to 55.2% in March, marking the lowest level since the election of President Donald Trump in November. Any reading above 50 indicates improving conditions
Economists polled by MarketWatch had forecast a 57.2% reading.
In February, the index had hit a 16-month high.
By and large, the latest ISM survey showed plenty of reason for optimism. Although production and orders pulled back, they were still quite high.
An index that measures employment also lost some ground, but executives said the bigger problem was a shortage of skilled labor instead of lack of growth.
“Worker shortages have become a real problem in food production and produce-growing areas,” one executive told ISM. “Service labor is tight,” said another executive at a government agency.
Also read: ADP says private sector created 263,000 U.S. jobs in March
Executives also expressed more concern about efforts in Washington to revamp the health-care law commonly known as Obamacare, tighten immigration laws and redo trade agreements.
The health-care industry, one of the largest and fastest-growing in the country, was especially on edge. “Uncertainty is making us hold on many projects,” an executive at a health-care provider said.
A separate ISM survey of manufacturing firms, however, showed less cause for worry in March. Resurgent manufacturers posted another strong month of growth and employment hit a six-year high.
On Wall Street, the Dow Jones Industrial Average
gained over 150 points in recent trading.