The Institute for Supply Management (ISM) reported on Wednesday its non-manufacturing index (NMI) came in at 57.3 in February, which was 1.8 percentage points higher than the January reading of 55.5 percent. This pointed to the biggest expansion in the services sector in a year.

Economists forecast the index to drop to 54.9 last month. A reading above 50 signals expansion, while a reading below 50 indicates contraction.

Of the 18 manufacturing industries, 16 reported growth last month, the ISM said, adding that most respondents are concerned about the coronavirus and its supply chain impact but remain positive about business conditions and the overall economy.

According to the report, the ISM's New Orders gauge climbed 6.9 percentage points to 63.1 percent in February from the reading of 56.2 percent in January. The Employment indicator rose 2.5 percentage points in February to 55.6 percent from the January reading of 53.1 percent. The Supplier Deliveries increased to 52.42 percent; up 0.7 percentage point from 51.7 percent in January. The Inventories surged 7.4 percentage points in February to 53.9 percent from the January reading of 46.5 percent. Meanwhile, the ISM's non-manufacturing business activity measure fell 3.1 percentage points to 57.8 percent from the January reading of 60.9 percent. The Prices index came in at 50.8, 4.7 percentage points lower than the January's 55.5 percent.