Service Industries Grew Faster Than Expected In July

service-industry-growth | Photo Courtesy of	 Victor1558	http://www.flickr.com/photos/76029035@N02/6829404047/sizes/q/Service industries in the U.S. got a positive boost when their July numbers showed more expansion than in the previous month, Businessweek.com reported recently.

The Institute for Supply Management’s non-manufacturing index climbed from 52.1 in June to 52.6 in July. Any numbers that are higher than 50 are a sign of expansion, according to the article.

However, this growth is tempered by ongoing political and economic challenges such as global growth and the fiscal cliff.

Earlier reports also reflected global weakness and a drop in consumer confidence. The Institute of Supply Management’s gauge of manufacturing activity and employment  fell during the month, indicating lower demand for domestic goods. Retailers used discounts in order to lure customers in during the crucial back-to-school shopping season.

Output per each full-time employee has increased across the board, especially here in the U.S. What does that mean? It means that people are working longer and harder for the same money. The growth in the service industry is a good sign. Hopefully the growth will continue and companies will feel comfortable enough with the economy to make investments in people and technology.

Source: Bloomberg Businessweek, August 2012