WASHINGTON, Oct 5: The US economy’s services sector took a hit in September from Hurricane Katrina and surging energy prices, the Institute for Supply Management said on Wednesday.

The ISM services or non-manufacturing index tumbled to 53.3 per cent from 65.0 per cent in August, falling to its lowest level since April 2003.

Readings over 50 per cent indicate expansion in that part of the economy, so the latest report means a more sluggish pace of growth in services, which represents the lion’s share of US economic output.

The figure was below the 60.0 per cent expected on Wall Street.

Still, the report showed expansion for the 30th consecutive month, said ISM survey chief Ralph Kauffman.

“Business activity increased at a slower rate in September than in August,” he noted. “Many members’ comments expressed concern about the continuing increase in oil and gas prices as well as Hurricane Katrina, and their impact on prices and economic activity.”

Eight of 17 non-manufacturing industry sectors reported increased activity in September compared with 13 that reported increased activity in August, ISM said.—AFP