ISM Services Index Rises to 59.8 in February

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he Institute for Supply Management said Thursday its services index rose to 59.8 in February, from 59.2 in January.

The services index measures the economy’s largest segment, including retail, financial, construction and other non-manufacturing industries, like trucking.

As with all ISM indices, figures above 50 indicate expansion. Bloomberg reported economists had forecast the indicator would rise to 60.

The increase was the fourth in five months and coupled with a record 62.5 reading for 2004 suggested the economy lost little momentum heading into the new year, Bloomberg said.

ISM said service-sector employment rose at a faster rate in February compared with January, rising to 59.6 from January’s 52.2, the 17th straight monthly increase.

Despite the positive report, ISM reported that its surveyed respondents voiced concerns over “railroad transportation inefficiencies, fuel surcharges and rate increases.”

In addition, they cited higher materials costs, especially plastic, steel and energy, and political and economic uncertainties which they said were driving up costs, ISM said.