U.S. service sector shrinks for fourth straight month

Special Report:Global Financial Crisis

WASHINGTON, Feb. 4 (Chinese media) -- Business activity in the U.S. service sector declined for the fourth consecutive month in January but at a slightly slower pace compared to December 2008, the Institute for Supply Management(ISM) said Wednesday in its latest non-manufacturing survey.

The research group based in Tempe, Arizona, said its index of business activity in the non-manufacturing sector rose to 42.9 last month from December's downwardly revised reading of 40.1.

A reading at or above 50 indicates expansion, while one below indicates contraction. The index was 37.4 in November and 44.6 in October.

For January, the new orders index increased to 41.6 from 38.9 in the previous month and the production reading was up to 44.2 from 38.9.

But the index for new export orders edged down to 39.0 from 39.5. Inventories also declined to 41.5 from 49.0.

The service sector -- everything from restaurants and hotels to banks and airlines -- represents about 80 percent of economic activity in the United States.

Of 18 industries in the survey, only two reported growth in January. They were health care and social assistance, and finance and insurance.

The ISM is a trade association representing approximately 40,000 supply management professionals. Its service sector index reflects the opinions of purchasing and supply executives at non-manufacturing industries.

"Respondents are concerned about the global economy and the continued decline in business and spending," Anthony Nieves, chair of the ISM non-manufacturing business survey committee said while releasing the survey.