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Survey: Helped by exports and new orders, service sector grew slightly in September

By Associated Press

11:16 AM EDT, October 3, 2008

NEW YORK (AP) _ Educational services, farms, utilities, stores and hospitals all saw their businesses expand slightly in September, thanks to strong exports and deliveries, a private research group's survey showed Friday.

The reading of 50.2 from the Institute for Supply Management was down from 50.6 in August. A reading above 50 signals growth. The index has hovered near the 50 "boom-bust" line for most of the year.

While automakers and construction companies are seeing a sharp decline in business, "the rest of the economy is just sort of treading along," said Stuart Hoffman, chief economist for PNC Financial Services Group. "Activity has flatlined, but that's not good enough. You need growth to create jobs."

Friday's reading was marginally better than economists' prediction of a reading of 50.0, according to the consensus estimate of Wall Street economists surveyed by Thomson/IFR.

Monday's manufacturing report by the same organization showed the worst reading since October 2001, following the Sept. 11 attacks, and economists called it a sign of recession.

According to the services report, which is based on a survey of the institute's members, educational services, agriculture, utilities, retail and health care are growing, while restaurants, real estate and wholesale are contracting.