WASHINGTON (Reuters) – U.S. providers business progress slowed for a second straight month in Might, however companies reported robust good points in new home and export orders, a survey confirmed on Friday.

The Institute for Provide Administration mentioned its non-manufacturing exercise index fell to a studying of 55.9 final month from 57.1 in April. Economists polled by Reuters had forecast the non-manufacturing index dropping to 56.4.

A studying above 50 signifies enlargement within the providers sector, which accounts for greater than two-thirds of U.S. financial exercise. The continued slowdown may mirror persistent provide constraints, which have been worsened by China’s zero-COVID coverage and Russia’s dragging conflict in opposition to Ukraine.

The ISM’s measure of recent orders obtained by providers companies rebounded to a studying of 57.6 final month from 54.6 in April. Spending is shifting again to providers from items. Companies additionally reported a rise in export orders.

Its providers business employment gauge additionally rebounded to 50.2 from a studying of 49.5 in April. The rise in employment helped companies to make some progress in clearing the backlog of unfinished work.

The ISM survey’s measure of provider deliveries fell to 61.3 from 65.1 in April. A studying above 50% signifies slower deliveries. Providers inflation continued to run excessive. A measure of costs paid by providers industries for inputs slipped to a still-high studying of 82.1 from 84.6 in April.

The Federal Reserve has elevated its coverage rate of interest by 75 foundation factors since March. It’s anticipated to hike the in a single day charge by half a proportion level at every of its subsequent conferences this month and in July. Fed Vice Chair Lael Brainard mentioned on Thursday she noticed little case for pausing in September.