The S&P Global US Services PMI climbed to 56.5 in August 2026 from 54.6 in July, coming in below the flash estimate of 56.8 but still comfortably above the market consensus of 54. This was the fastest pace of expansion in private sector activity since December 2020, underscoring the sector’s resilience following the outbreak of war in Iran, which drove up energy prices and in turn raised borrowing costs for businesses.
New business increased at the strongest rate in more than 20 months, with survey respondents pointing to new client acquisitions and a marked rise in export orders. As a result, capacity constraints persisted and backlogs of work accumulated at the quickest pace in three years. In response, firms boosted employment at the fastest rate in 18 months.
Input cost inflation remained above its long-run average, prompting companies to raise output prices in an effort to protect profit margins. Looking ahead, business expectations stayed in positive territory, although they continued to run below their historical norm.
