Business activity in the non-manufacturing sector continued to increase in May, say U.S. purchasing and supply executives in the latest non-manufacturing Institute for Supply Management Report On Business. But the ISM’s business activity index declined, meaning the sector is growing at a slower rate.

“Non-manufacturing business activity increased for the 38th consecutive month in May,” says Anthony Nieves, chairman of the Institute for Supply Management’s non-manufacturing business survey committee; and senior vice president, supply management for Hilton Hotels Corp. “Business activity, new orders and backlog of orders increased at slower rates in May than in April. Prices, new export orders, imports and employment increased at faster rates. Thirteen of 17 non-manufacturing industry sectors report increased activity in May compared to 14 that reported increased activity in April… The overall indication in May is continued economic growth in the non-manufacturing sector.”

However, the ISM’s non-manufacturing business activity index, which registered 60.1% in May compared to 63% in April, indicates a slower rate of growth of activity in May. The overall implication is that non-manufacturing business activity has increased, but at a slower rate. The slower rate of growth indicated by this index is also reflected in other indices this month: a five-percentage point decrease in the new orders index and a two-percentage point decrease in the backlog of orders index. This month, 13 sectors report increased business activity, three are reporting decreased activity, and one is indicating unchanged activity compared to April.

The 13 industries reporting growth in May — listed in order — are: agriculture, communication, utilities, health services, mining, construction, insurance, wholesale trade, retail trade, transportation, real estate, other services and public administration. The one industry reporting activity the same as last month is legal services. The three industries reporting decreased activity from April to May are: entertainment, finance and banking, and business services.

The industries reporting the highest rates of growth of business activity in May are: agriculture, communication, utilities, health services, mining, construction, insurance and wholesale trade. The three industries reporting contraction of business activity in May are: entertainment, finance and banking, and business services.

Employment activity in the non-manufacturing sector increased at a faster rate in May compared to April. This was the 22nd consecutive monthly increase in non-manufacturing employment. ISM’s non-manufacturing employment index for May is 58%, a rise of 1.5% from the 56.5% reported in April. Eleven industries are reporting increased employment, three report a decrease, and three indicate employment is unchanged from April. Comments from respondents include:

The industries reporting the highest rates of growth in employment in May are: agriculture, legal services, transportation, utilities, retail trade and insurance. The three industries reporting a reduction in employment in May are: entertainment, finance and banking, and communication.