updated 12/5/2005 1:32:05 PM ET 2005-12-05T18:32:05

The nation’s service sector grew in November, but at a less-robust pace than in October and slightly slower than analysts expected, the Institute for Supply Management said Monday.

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The Tempe, Ariz., group said its index of nonmanufacturing activity dropped to 58.5 in November from 60 the month before. The November reading was slightly below the 59 reading analysts had expected.

Readings of 50 and above indicate growth, while numbers below that indicate contraction. The index reading has averaged 60.5 over the past year, the institute said, but it fell as low as 53.3 as recently as September when businesses were grappling with the spike in oil prices following Hurricane Katrina.

The November growth marked the 32nd consecutive monthly expansion in the services sector of the economy.

Ralph G. Kauffman, chairman of the institute’s survey committee, said in a statement that business activity and order backlogs increased at slower rates in November than in October, while new orders and employment increased at faster rates.

He said that comments from purchasing and supply agents, who are surveyed each month, were “generally positive.”

But, he added, “there is still significant concern about the relatively high level of energy prices and its impact on freight costs and on the prices of other materials and services.”

The group’s index for companies’ backlog of orders eased to 54 in November from 55 in October, while the index for prices also fell back to 74.2 in November from 78 the month before.

Among the categories showing expansion were new orders, up to 59.5 in November from 58.2 the month before, and employment, up to 57 in November from 52.9 in October.

Twelve service industries reported growth in November — mining, legal services, health services, business services, retail trade, insurance, utilities, construction, public administration, wholesale trade, communication and miscellaneous services. Three reported no change — transportation, real estate and entertainment. Two indicated decreased activity — agriculture and finance and banking.

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