Economic activity in the US services sector expanded in March but at a slower rate than in February. The Institute for Supply Management’s Services PMI slipped to a reading of 51.4% in March from 52.6% in February. Readings above 50% indicate expansion.

“The decrease in the rate of growth in March and the decline in the composite index is a result of slower new orders growth, faster supplier deliveries and a contraction in employment,” Anthony Nieves, chair of ISM’s services business survey committee, said in a press release.

“Respondents indicated continuing improvement in logistics and the supply chain,” Nieves said. “Employment challenges remain a combination of difficulties in backfilling positions and/or controlling labor expenses.”

The employment index portion of the Services PMI composite index contracted in March, though at a slower pace then in February. It posted a reading of 48.5% in March, up slightly from 48.0% in February. It was the third contraction in four months.

The six industries reporting an increase in employment in March, listed in order, are accommodation and food services; construction; public administration; utilities; healthcare and social assistance; and educational services.