The Institute for Supply Management (ISM) reported on Wednesday that its non-manufacturing index (NMI) came in at 62.7 in April, which was 1.0 percentage point lower than an unrevised March reading of 63.7 percent, which was the highest on record. The reading pointed to the growth in the services sector for the 11th straight month.

Economists forecast the index to increase to 64.3 last month. A reading above 50 signals expansion, while a reading below 50 indicates contraction.

Of the 18 manufacturing industries, 17 reported gains last month, the ISM said, adding that respondents' comments indicated that pent-up demand was continuing, while production-capacity constraints, material shortages, weather and challenges in logistics and human resources continued to affect deliveries.

According to the report, the ISM’s New Orders gauge declined 4.0 percentage points to 63.2 percent from the March reading, while its non-manufacturing Production measure fell 6.7 percentage points to 62.7 percent and the Inventories indicator decreased 4.9 percentage points to 49.1 percent. Meanwhile, the Employment indicator rose 1.6 percentage points to 58.8 percent and the Supplier Deliveries index jumped 5.1 percentage points to 66.1 percent. Elsewhere, the Prices index went up 2.8 percentage points to 76.8 percent, indicating that prices increased in April, and at a faster rate. This was the index's highest reading since July 2008.

Commenting on the data, the Chair of the ISM Services Business Survey Committee, Anthony Nieves, noted, “The past relationship between the Services PMI and the overall economy indicates that the Services PM for April (62.7 percent) corresponds to a 4.7-percent increase in real gross domestic product (GDP) on an annualized basis.”