The pace of growth in the U.S. services sector fell in March to its lowest level in three months but exports rose to the highest level in over two years, according to an industry report released on Monday. The Institute for Supply Management said its services index fell to 56.5 last month from 56.9 in February. The reading was in line with economists’ forecasts, according to a Reuters survey.
The March reading was the lowest since a matching reading last December. A reading above 50 indicates expansion in the sector. The exports index rose, however, to 59.0 from 53.0 in February to mark the highest reading since February 2013. The employment index also rose, hitting its highest level since last October, with the reading coming in at 56.6 compared with 56.4 in February.
Its index of business activity fell, meanwhile, to 57.5 in March from 59.4 in February and marking the lowest reading in a year. The rise in the exports index came despite the U.S. dollar’s surge against a basket of major currencies of more than 20 percent since last May. A strong dollar typically crimps demand for U.S exports and reduces the value of overseas sales when they are translated back into U.S. dollars.