US Business Activity Slows to 10-Month Low

The flash S&P Global US Composite PMI slipped to 51.4 in March 2026 from 51.9 in February, marking its lowest level since April last year and signaling a second straight month of slowing growth. While still above the 50 threshold that indicates expansion, the reading points to the weakest quarterly performance since late 2023. Business activity slowed to an 11-month low as new orders softened and prices surged following the war in the Middle East. The slowdown was led by the services sector, while manufacturing showed resilience with stronger output and order growth, supported in part by reduced tariff concerns. Confidence across the private sector weakened, leading to the first drop in employment in over a year. Input costs rose sharply, driving the fastest increase in selling prices since August 2022, largely linked to higher energy costs and tighter supply, while manufacturing delivery times lengthened significantly.

The S&P Global US Composite PMI dropped to 51.9 in February from 53 in January, the lowest in ten months and below preliminary estimates of 52.3. Growth was constrained by a broad-based weakening in the respective expansions in both manufacturing and service sector output. There was also a concurrent moderation in new business growth midway through the first quarter. Firms took on additional workers, but only fractionally as confidence in the outlook remained below its historical trend. Prices data meanwhile showed that increases in both costs and selling prices were little changed, and well above respective series averages.

The S&P Global US Composite PMI fell to 52.3 in February 2026 from 53.0 in January, signaling the slowest pace of private-sector expansion since April 2025, according to preliminary data. Growth moderated across both sectors, with manufacturing and services activity easing to seven- and ten-month lows, respectively. New orders also softened, while export demand declined at one of the sharpest rates in the past year. Employment increased only marginally for a third straight month, marking the weakest job growth since last April. On the pricing side, input cost inflation edged higher, often linked to tariffs and rising labor expenses, while output prices climbed at the fastest pace since August. Despite the slowdown, business confidence strengthened, with year-ahead output expectations rising to a 13-month high.