| Actual | Previous | |
| Composite Index | 50.3 | 51.9 |
| Services Index | 49.8 | 51.7 |
Highlights
The S&P Global US Composite Purchasing Managers' Index final reading came in at 50.3 in March compared to 51.9 in February, and 53.0 in January, the weakest since September 2023. A renewed contraction in service sector activity offset a stronger increase in manufacturing output at the end of the first quarter.
S&P said the growth in new work slowed to a three-month low, while business confidence in the coming year was the most subdued since October 2025. As a result, private sector employment fell for the first time in just over a year while input price inflation picked up to the highest seen in 2026 so far whilst output charges rose at a stronger pace.
Confidence in the outlook weakened against a backdrop of rising cost pressures as a surge in energy prices following the outbreak of war in the Middle East cast a shadow over the sector. Employment numbers fell fractionally amid an uncertain outlook, the report said.
The US Services PMI Business Activity Index recorded 49.8 in March, compared to 51.7 in February, and 52.7 in January. It was the lowest index reading for over three years and consistent with a fractional contraction in activity.
Export trade worsened to a greater degree than in February, falling solidly overall. Firms noted that the adverse impact of tariffs on trade was compounded by the hit to sentiment of the war in the Middle East, the report said.
There was also an increase in labor-related costs and material supply shortages.
Where possible, firms sought to pass on their higher costs to clients via a rise in their own selling prices, it said, adding, Inflation was again above its long-run trend, having accelerated to an eight-month high during March.
Definition
US Services Purchasing Managers' Index (PMI) is based on monthly questionnaire surveys collected from over 400 U.S. companies which provide a leading indication of what is happening in the private sector services economy. It is seasonally adjusted and is calculated from seven components, including New Business, Employment and Business Expectations.
Description
Investors need to keep their fingers on the pulse of the economy because it indicates how various types of investments will perform. The Markit Services PMI provides advance insight into the services sector, which gives investors a better understanding of business conditions and valuable information about the economic backdrop of various markets. The stock market likes to see healthy economic growth which generally translates to higher corporate profits. The bond market prefers less rapid growth and is extremely sensitive to whether the economy is growing too quickly and causing potential inflationary pressures. The PMI data are also used by many Central Banks to help make interest rate decisions.
The IHS Markit Services Flash data give a detailed look at the services sector, the pace of growth and the direction of this sector. Since the service sector accounts for more than three-quarters of U.S. GDP, this report has a significant influence on the markets. In addition, its sub-indexes provide a picture of new business, employment, business expectations and prices.