- A measure of U.S. non-manufacturing industries grew to 58.6 in May, beating estimates.
- U.S. non-manufacturing industries have seen 100 straight months of expansion.
- Concerns for future growth lie in escalating tariffs and trade talks.
Growth in U.S. non-manufacturing increased in May, reaching a 100-month streak of overall expansion.
The Institute of Supply Management’s measure of the non-manufacturing sector grew to 58.6 from 56.8 in April, beating a forecast of 57.6 by a survey of Thomson Reuters analysts.
According to the institute’s metric, the 14 U.S. non-manufacturing industries tracked by the index saw 100 straight months of expansion. A reading above 50 indicates expansion in the service sector while a reading below 50 signals contraction.
Industry leaders said the primary areas of concern for the service industry come from new tariffs on goods like aluminum and steel as well as increased trade discussions on the North American Free Trade Agreement, the European Union and North Korea.
Respondents to the metric said these concerns could raise supply-side costs, affecting the ability to continue growth.
“The majority of respondents are optimistic about business conditions and the overall economy,” said Chair of the Institute for Supply Management Anthony Nieves. “There continue to be concerns about the uncertainty surrounding tariffs, trade agreements and the impact on cost of goods sold.”