Services PMI® at 55.4%; August 2026 ISM® Services PMI® Report

Business Activity Index at 61.7%; New Orders Index at 60.9%; Employment Index at 47.8%; Supplier Deliveries Index at 51.3%

TEMPE, Ariz., Sept. 3, 2026 /PRNewswire/ — Economic activity in the services sector continued to expand in August, say the nation’s purchasing and supply executives in the latest ISM^® Services PMI^® Report. The Services PMI^® registered 55.4 percent, the 26th consecutive month in expansion territory.

The report was issued today by Steve Miller, CPSM, CSCP, Chair of the Institute for Supply Management^® (ISM^®) Services Business Survey Committee: “In August, the Services PMI^® registered 55.4 percent, an increase of 1.3 percentage points compared to July’s figure of 54.1 percent. The Business Activity Index remained in expansion territory in August, increasing 2.6 percentage points to 61.7 percent from July’s reading of 59.1 percent. The New Orders Index registered 60.9 percent, 3.7 percentage points above July’s figure of 57.2 percent. The Employment Index contracted for a second straight month with a reading of 47.8 percent, a 0.4-percentage point increase from the 47.4 percent recorded in July.

“The Supplier Deliveries Index registered 51.3 percent, 1.5 percentage points lower than the 52.8 percent recorded in July. This is the 21st consecutive month that the index has been in expansion territory, indicating slower supplier delivery performance. (Supplier Deliveries is the only ISM^® PMI^® Reports index that is inversed; a reading of above 50 percent indicates slower deliveries, which is typical as the economy improves and customer demand increases.)

“The Prices Index registered above 70 percent for the fifth time in six months; the reading of 72.6 percent in August is 2.3 percentage points above July’s figure of 70.3 percent. The index has exceeded 60 percent for 21 straight months, with its 12-month average increasing by 0.4 percentage point to 68.5 percent, the highest since April 2023.

“The Inventories Index registered 56.7 percent, up 5.3 percentage points from July’s figure of 51.4 percent. The Inventory Sentiment Index expanded for the 40th consecutive month, registering 54.1 percent, up 1.6 percentage points from July’s figure of 52.5 percent. The Backlog of Orders Index remained in expansion territory for a seventh straight month, increasing 4.7 percentage points to 55.6 percent in August from July’s reading of 50.9 percent. The New Export Orders remained at or above 50 percent for the seventh month in a row, registering 56.3 percent, an increase of 4.3 percentage points compared to the 52 percent recorded in July. The Imports Index recorded a second straight month in expansion territory; the figure of 56.3 percent in August is an increase of 4.5 percentage points compared to the 51.8 percent registered in July.

“Twelve industries indicated growth in August, one fewer than the previous month, while five reported contraction, up one compared to July. The August Services PMI^® reading of 55.4 percent is 1.7 percentage points above the 12-month average of 53.7 percent. The uptick of 0.3 percentage point over July’s 12-month average of 53.4 percent marks the eighth straight month that figure has increased.”

Miller continues, “The Prices Index registered 72.6 percent, broke the 70-percent threshold for the fifth time in six months and hit its highest level since August 2022 (72.6 percent). After six commodities were reported as down in price in July, that total dropped to a single commodity: fuel, which was also reported as up in price for a seventh month in a row. Petroleum-related products, diesel, and gasoline were again reported as up in price in August. Graphics processing units (GPUs) and steel were added as commodities in short supply. The Supplier Deliveries Index continued to indicate slower performance; however, the reading of 51.3 percent is the fourth straight decrease and is 2.4 percentage points below the 12-month average of 53.7 percent.

“The Employment Index (47.8 percent) remained below its 12-month average of 48.8 percent. This index has been below 50 percent in 13 of the last 18 months. However, the Business Activity Index had its highest reading since hitting 62.7 percent in November 2022, and the New Orders Index had its highest reading since February 2023 (61 percent).

“Tariffs and the Middle East conflict returned as the most cited issues impacting respondents’ supply chains. Positive summer seasonality was also a common theme, with Accommodation & Food Services and Arts, Entertainment & Recreation both among the five fastest-growing industries in August. As a potentially positive sign for employment, there was a slight reduction in the share of companies cutting staff levels, down from 19 percent in July to 17.1 percent in August. The Business Activity and New Orders indexes at multiyear highs could signal a shift to increased employment in the services sector. The Backlog of Orders index reached its highest level since a reading of 55.9 percent in February 2026, some respondents attributed increased backlogs to low staffing levels at their companies.”

INDUSTRY PERFORMANCE
The 12 services industries reporting growth in August — listed in order — are: Mining; Real Estate, Rental & Leasing; Accommodation & Food Services; Wholesale Trade; Arts, Entertainment & Recreation; Educational Services; Retail Trade; Information; Professional, Scientific & Technical Services; Utilities; Transportation & Warehousing; and Public Administration. The five industries reporting a contraction in the month of August are: Agriculture, Forestry, Fishing & Hunting; Construction; Management of Companies & Support Services; Finance & Insurance; and Health Care & Social Assistance.

WHAT RESPONDENTS ARE SAYING

• “General business conditions are positive. The challenges lie in managing through the dynamic nature of the administration’s policies — tariffs and Middle East conflict — that have caused numerous input cost headwinds for suppliers and us.” [Accommodation & Food Services]
• “The bond market pushed 30-year mortgage rates up to 6.67 percent, reducing affordability and moving prospective buyers back to the sidelines. The new-build housing market continues to slow with the selling season coming to a close and the start of the new school year. Rate buydowns and discounts have become the norm instead of the tool to drive traffic.” [Construction]
• “The conflict in Iran and strain on the oil supplies has resulted in our paying higher cost for fuel. Locally, our economy continues to perform well, and our housing market is solid. We expect our enrollment to remain steady as long as the local economy stays strong.” [Educational Services]
• “Rising health-care costs, regulatory complexity and reimbursement pressure continue to drive a cautious purchasing environment within health insurers. Focus remains on cost management, supplier performance, operational efficiency and risk mitigation, resulting in increased scrutiny of supplier value, contract commitments and strategic investments.” [Finance & Insurance]
• “We received a few communications regarding tariffs that are being refunded. Fewer materials being back-ordered at this time.” [Health Care & Social Assistance]
• “Concerns about market trends, reduced hospital sources of revenue and increasing debt management creating reluctance of our customers to expand.” [Management of Companies & Support Services]
• “Business is picking up and forecast to increase over the next six months.” [Other Services]
• “The stacked Section 301 duties plus the newer forced-labor related tariffs are keeping landed costs elevated and forcing constant TCO recalculation. We are actively dual-sourcing and evaluating nearshoring options, but qualified capacity, lead times and quality consistency are limited for certain specialty materials and components. The results are higher inventory buffers, longer planning cycles, and margin pressure that we can only partially pass through. On the positive side, Florida ports (especially Port Everglades and the broader South Florida gateway) remain relatively fluid compared with the congestion spikes earlier in the year on the West Coast and in Europe.” [Professional, Scientific & Technical Services]
• “The memory shortage is continually getting worse. For devices requiring (memory) cards, inventory is low and prices are high.” [Retail Trade]
• “The electrical distribution industry volume demand and opportunities remain very strong. Commodities-based products of materials like copper, aluminum and polyvinyl chloride continue to have price increases and adjustments on a weekly basis. Geopolitical issues like tariffs continue to impact pricing as well. Supplier capacities are still strained due high market demands.” [Wholesale Trade]

ISM^® Services PMI^® Report data is seasonally adjusted for the Business Activity, New Orders, Employment and Prices indexes. ISM^® Manufacturing PMI^® Report data is seasonally adjusted for New Orders, Production, Employment and Inventories indexes.
*Number of months moving in current direction.

COMMODITIES REPORTED UP/DOWN IN PRICE, AND IN SHORT SUPPLY

Commodities Up in Price
Computers and Related Items (4); Copper (9); Copper Based Products; Diesel (6); Food Products; Freight; Fuel* (7); Gasoline (7); Labor; Memory Products (8); Petroleum Based Products (4); Software — Licensing (7); and Steel Products (5).

Commodities Down in Price
Fuel* (3).

Commodities in Short Supply
Graphics Processing Units (GPUs); Labor (3); Memory Components (8); Steel; Steel Products (3); and Wire and Cable (3).

Note: The number of consecutive months the commodity is listed is indicated after each item.
*Indicates both up and down in price.

AUGUST 2026 SERVICES INDEX SUMMARIES

Services PMI^®
 In August, the Services PMI^® registered 55.4 percent, 1.7 percentage points above its 12-month moving average of 53.7 percent. A reading above 50 percent indicates the services sector economy is generally expanding; below 50 percent indicates it is generally contracting.

A Services PMI^® above 48.1 percent, over time, generally indicates an expansion of the overall economy. Therefore, the August Services PMI^® indicates the overall economy is expanding for the 75th straight month. Miller says, “The past relationship between the Services PMI^® and the overall economy indicates that the Services PMI^® for August (55.4 percent) corresponds to a 2.3-percentage point increase in real gross domestic product (GDP) on an annualized basis.”

SERVICES PMI^® HISTORY

Business Activity
ISM^®‘s Business Activity Index continued in expansion in August; the reading of 61.7 percent is 2.6 percentage points higher than the 59.1 percent recorded in July. August’s reading is 5.5 percentage points above the index’s 12-month moving average of 56.2 percent. Comments from respondents include: “Back-to-school sales uplifted the order count; accounts are now trying to restock for the holiday season as we are seeing both increased inbounds and outbounds” and “Peak season started in late May and will run through mid-September.”

The 13 industries reporting an increase in business activity for the month of August — listed in order — are: Real Estate, Rental & Leasing; Mining; Educational Services; Accommodation & Food Services; Arts, Entertainment & Recreation; Information; Wholesale Trade; Transportation & Warehousing; Retail Trade; Professional, Scientific & Technical Services; Utilities; Finance & Insurance; and Public Administration. The four industries reporting a decrease in business activity in the month of August are: Agriculture, Forestry, Fishing & Hunting; Construction; Other Services; and Management of Companies & Support Services.

New Orders
ISM^®‘s New Orders Index remained in expansion territory at 60.9 percent in August, 3.7 percentage points higher than the reading of 57.2 percent in July. The index has expanded for 15 consecutive months. Comments from respondents include: “Higher attendance in theaters driving higher demand” and “Large capital investments in transmission and generation services are leading to increased business activity, from head count to material purchasing and planning out items for long lead times.”

The 14 industries reporting an increase in new orders for the month of August — listed in order — are: Real Estate, Rental & Leasing; Mining; Educational Services; Arts, Entertainment & Recreation; Wholesale Trade; Other Services; Retail Trade; Accommodation & Food Services; Professional, Scientific & Technical Services; Management of Companies & Support Services; Information; Finance & Insurance; Health Care & Social Assistance; and Transportation & Warehousing. The only industry reporting a decrease in new orders in the month of August is Construction.

Employment
Employment activity in the services sector remained in contraction for its second month in a row; the index registered 47.8 percent in August. The reading is up 0.4 percentage point from the July figure of 47.4 percent and 1 percentage point below the index’s 12-month average of 48.8 percent. Comments from respondents include: “We have lost employees due to normal attrition and are having issues backfilling these positions with qualified candidates” and “High turnover to local defense contractor hiring surge.”

The seven industries reporting an increase in employment in August — listed in order — are: Accommodation & Food Services; Utilities; Mining; Wholesale Trade; Transportation & Warehousing; Retail Trade; and Construction. The eight industries reporting a decrease in employment in August — listed in order — are: Agriculture, Forestry, Fishing & Hunting; Finance & Insurance; Management of Companies & Support Services; Real Estate, Rental & Leasing; Other Services; Health Care & Social Assistance; Information; and Educational Services.

Supplier Deliveries
In August, the Supplier Deliveries Index indicated slower performance for the 21st month in a row. The index registered 51.3 percent, down 1.5 percentage points from the 52.8 percent recorded in July and its lowest level since October 2025 (50.8 percent). A reading above 50 percent indicates slower deliveries, while a reading below 50 percent indicates faster deliveries. Comments from respondents include: “Suppliers are cutting back on head counts, slowing deliveries to the job site and reducing accuracy of materials orders sent” and “Delays from suppliers as they retool lines and allocate capacity away from current-generation components toward upcoming next-generation AI silicon and platforms.”

The 10 industries reporting slower deliveries in August — in the following order — are: Mining; Other Services; Information; Construction; Finance & Insurance; Professional, Scientific & Technical Services; Public Administration; Health Care & Social Assistance; Educational Services; and Wholesale Trade. The two industries reporting faster deliveries in August are: Real Estate, Rental & Leasing; and Transportation & Warehousing. Six industries reported no change in supplier deliveries in August.

Inventories
The Inventories Index expanded for the seventh month in a row, registering 56.7 percent, a 5.3-percentage point increase compared to the 51.4 percent reported in July. Of the total respondents in August, 26 percent indicated they do not have inventories or do not measure them. Comments from respondents include: “Building up long lead items for 2027” and “Price inflation contributing to raw dollar increases, and overall inventory unit volume continues to grow as projects are booked and inventory investments are made to support.”

The 11 industries reporting an increase in inventories in August — in the following order — are: Accommodation & Food Services; Real Estate, Rental & Leasing; Construction; Mining; Educational Services; Utilities; Wholesale Trade; Information; Professional, Scientific & Technical Services; Health Care & Social Assistance; and Management of Companies & Support Services. The five industries reporting a decrease in inventories in August are: Arts, Entertainment & Recreation; Agriculture, Forestry, Fishing & Hunting; Other Services; Finance & Insurance; and Transportation & Warehousing.

Prices
Prices paid by services organizations for materials and services increased in August for the 111th consecutive month. The Prices Index registered 72.6 percent, an increase of 2.3 percentage points from July’s reading of 70.3 percent. August’s reading is its highest since August 2022 (72.6 percent).

Fifteen industries reported an increase in prices paid during the month of August, in the following order: Transportation & Warehousing; Other Services; Real Estate, Rental & Leasing; Finance & Insurance; Information; Wholesale Trade; Accommodation & Food Services; Construction; Professional, Scientific & Technical Services; Management of Companies & Support Services; Utilities; Retail Trade; Public Administration; Health Care & Social Assistance; and Educational Services. No industries reported a decrease in prices paid.

NOTE: Commodities reported as up in price and down in price are listed in the commodities section of this report.

Backlog of Orders
The ISM^® Services Backlog of Orders Index registered 55.6 percent, a 4.7-percentage point increase compared to the 50.9 percent reported in July. The index has been in expansion territory for seven straight months, its longest continuous growth since a string of 26 months that ended in February 2023. Of the total respondents in August, 27 percent indicated they do not measure backlog of orders. Respondent comments include: “We currently have a bit of a bottleneck in terms of IT projects due to a lack of software development resources” and “In need of more personnel; on hiring freeze.”

The 10 industries reporting an increase in order backlogs in August — in the following order — are: Finance & Insurance; Arts, Entertainment & Recreation; Other Services; Accommodation & Food Services; Utilities; Real Estate, Rental & Leasing; Wholesale Trade; Professional, Scientific & Technical Services; Educational Services; and Health Care & Social Assistance. The four industries reporting a decrease in order backlogs in August are: Agriculture, Forestry, Fishing & Hunting; Construction; Retail Trade; and Transportation & Warehousing.

New Export Orders
Orders and requests for services and other non-manufacturing activities to be provided outside of the U.S. by domestically based companies expanded in August. The New Export Orders Index registered 56.3 percent, up 4.3 percentage points compared to the July reading of 52 percent. Of the total respondents in August, 38 percent indicated they do not perform, or do not separately measure, orders for work outside of the U.S. Respondent comments include: “Continuing to bring sources of supply to the U.S.-Mexico-Canada Agreement area given the unpredictability of the administration’s tariff regimen and geopolitical decisions” and “U.S. and Mexico corporations are diverting some jobs to U.S. contract manufacturers from China, India and Vietnam; this might be for a short period until the economy is stable.”

The seven industries reporting an increase in new export orders in August, in order, are: Real Estate, Rental & Leasing; Mining; Construction; Retail Trade; Professional, Scientific & Technical Services; Transportation & Warehousing; and Finance & Insurance. The three industries reporting a decrease in new export orders in August are: Wholesale Trade; Information; and Accommodation & Food Services. Eight industries reported no change in exports in August.

Imports
The Imports Index was in expansion territory in August for the second consecutive month and fifth out of the last six, registering 56.3 percent, 4.5 percentage points higher than the 51.8 percent reported in July. Of the total respondents in August, 37 percent reported that they do not use, or do not track the use of, imported materials. Respondent comments include: “Costs are mixed but trending mostly higher as tariffs, ocean freight and geopolitical disruptions have been elevating landed costs, but some underlying commodity prices remain stable or have slightly declined” and “Shortages of steel, conductor and wire supply in the U.S. are creating procurement challenges and increasing pressure on lead times.”

The seven industries reporting an increase in imports for the month of August are: Public Administration; Real Estate, Rental & Leasing; Accommodation & Food Services; Wholesale Trade; Transportation & Warehousing; Professional, Scientific & Technical Services; and Utilities. The two industries reporting a decrease in imports in August are: Information; and Health Care & Social Assistance. Nine industries reported no change in imports in August.

Inventory Sentiment
The ISM^® Services Inventory Sentiment Index was in expansion (or “too high”) territory for the 40th consecutive month in August; the reading of 54.1 percent is an increase of 1.6 percentage points compared to July’s figure of 52.5 percent. This reading indicates that respondents feel their companies’ inventory levels are too high when correlated to business requirements.

The seven industries reporting sentiment that their inventories were too high in August, in order, are: Other Services; Real Estate, Rental & Leasing; Educational Services; Accommodation & Food Services; Utilities; Wholesale Trade; and Management of Companies & Support Services. The four industries reporting a decrease in inventory sentiment in August are: Agriculture, Forestry, Fishing & Hunting; Finance & Insurance; Professional, Scientific & Technical Services; and Health Care & Social Assistance. Seven industries reported no change in inventory sentiment in August.

About This Report
DO NOT CONFUSE THIS NATIONAL REPORT with the various regional purchasing reports released across the country. The national report’s information reflects the entire U.S., while the regional reports contain primarily regional data from their local vicinities. Also, the information in the regional reports is not used in calculating the results of the national report. The information compiled in this report is for the month of August 2026.

The data presented herein is obtained from a survey of supply executives in the services sector based on information they have collected within their respective organizations. ISM^® makes no representation, other than that stated within this release, regarding the individual company data collection procedures. The data should be compared to all other economic data sources when used in decision-making.

Data and Method of Presentation
The ISM^® Services PMI^® Report (formerly the Non-Manufacturing ISM^® Report On Business^®) is based on data compiled from purchasing and supply executives nationwide. Membership of the Services Business Survey Panel (formerly Non-Manufacturing Business Survey Committee) is diversified by the North American Industry Classification System (NAICS), based on each industry’s contribution to gross domestic product (GDP). The Services Business Survey Panel responses are divided into the following NAICS code categories: Agriculture, Forestry, Fishing & Hunting; Mining; Utilities; Construction; Wholesale Trade; Retail Trade; Transportation & Warehousing; Information; Finance & Insurance; Real Estate, Rental & Leasing; Professional, Scientific & Technical Services; Management of Companies & Support Services; Educational Services; Health Care & Social Assistance; Arts, Entertainment & Recreation; Accommodation & Food Services; Public Administration; and Other Services (services such as Equipment & Machinery Repairing; Promoting or Administering Religious Activities; Grantmaking; Advocacy; and Providing Dry-Cleaning & Laundry Services, Personal Care Services, Death Care Services, Pet Care Services, Photofinishing Services, Temporary Parking Services, and Dating Services). The data are weighted based on each industry’s contribution to GDP. According to U.S. Bureau of Economic Analysis (BEA) estimates (the average of the fourth quarter 2024 GDP estimate and the GDP estimates for first, second, and third quarter 2025, as released on January 22, 2026), the six largest services sectors are: Real Estate, Rental & Leasing; Public Administration; Professional, Scientific, & Technical Services; Health Care & Social Assistance; Information; and Finance & Insurance.

Survey responses reflect the change, if any, in the current month compared to the previous month. For each of the indicators measured (Business Activity, New Orders, Backlog of Orders, New Export Orders, Inventory Change, Inventory Sentiment, Imports, Prices, Employment and Supplier Deliveries), this report shows the percentage reporting each response and the diffusion index. Responses represent raw data and are never changed. Data is seasonally adjusted for Business Activity, New Orders, Prices and Employment. All seasonal adjustment factors are subject annually to relatively minor changes when conditions warrant them. The remaining indexes have not indicated significant seasonality.

The Services PMI^® is a composite index based on the diffusion indexes for four of the indicators with equal weights: Business Activity (seasonally adjusted), New Orders (seasonally adjusted), Employment (seasonally adjusted) and Supplier Deliveries. Diffusion indexes have the properties of leading indicators and are convenient summary measures showing the prevailing direction of change and the scope of change. An index reading above 50 percent indicates that the services economy is generally expanding; below 50 percent indicates that it is generally declining. Supplier Deliveries is an exception. A Supplier Deliveries Index above 50 percent indicates slower deliveries and below 50 percent indicates faster deliveries.

A Services PMI^® above 48.1 percent, over time, indicates that the overall economy, or gross domestic product (GDP), is generally expanding; below 48.1 percent, it is generally declining. The distance from 50 percent or 48.1 percent is indicative of the strength of the expansion or decline.

The ISM^® Services PMI^® Report survey is sent out to Services Business Survey Panel respondents in the first part of each month. Respondents are asked to ONLY report on U.S. operations for the current month. ISM^® receives survey responses throughout most of any given month, with the majority of respondents generally waiting until late in the month to submit responses to give the most accurate picture of current business activity. ISM^® then compiles the report for release on the third business day of the following month.

The industries reporting growth, as indicated in the ISM^® Services PMI^® Report, are listed in the order of most growth to least growth. For the industries reporting contraction or decreases, those are listed in the order of the highest level of contraction/decrease to the least level of contraction/decrease.

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The Institute for Supply Management^® (“ISM^®“) PMI^® Reports, formerly Report On Business^®, (Manufacturing and Services reports) (“ISM PMI^®“) contain information, text, files, images, video, sounds, musical works, works of authorship, applications, and any other materials or content (collectively, “Content”) of ISM (“ISM PMI^® Content”). ISM PMI^® Content is protected by copyright, trademark, trade secret, and other laws, and as between you and ISM, ISM owns and retains all rights in the ISM PMI^® Content. ISM hereby grants you a limited, revocable, nonsublicensable license to access and display on your individual device the ISM PMI^® Content (excluding any software code) solely for your personal, non-commercial use. The ISM PMI^® Content shall also contain Content of users and other ISM licensors. Except as provided herein or as explicitly allowed in writing by ISM, you shall not copy, download, stream, capture, reproduce, duplicate, archive, upload, modify, translate, publish, broadcast, transmit, retransmit, distribute, perform, display, sell, or otherwise use any ISM PMI^® Content.

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You shall not create, recreate, distribute, incorporate in other work or advertise an index of any portion of the Content unless you receive prior written authorization from ISM. Requests for permission to reproduce or distribute ISM PMI^® Content can be made by contacting in writing at: ISM Research, Institute for Supply Management, 350 W. Washington St. — Papago Gateway, Suite 301, Tempe, AZ 85288-1495, or by emailing kcahill@ismworld.org; Subject: Content Request.

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About Institute for Supply Management^®

ISM is the world’s first professional association for supply chain — founded in 1915, before the term ‘supply chain’ was widely used. We didn’t enter this profession. We helped shape it. Today, we’re a community of over 200,000 professionals in more than 100 countries — early-career practitioners building credentials, experienced leaders seeking strategic insight, and organizations developing their procurement teams that drive their business forward. What connects us is a shared belief that supply chain is strategic work that deserves world-class support. For more information, please visit: https://www.ismworld.org.

The full text version of the ISM^® Services PMI^® Report is posted on ISM^®‘s website at www.ismrob.org on the third business day* of every month after 10:00 a.m. ET. The one exception is in January, the report is released on the fourth business day of the month.

The next ISM^® Services PMI^® Report featuring September 2026 data will be released at 10:00 a.m. ET on Monday, October 5, 2026.

*Unless the New York Stock Exchange is closed.

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SOURCE Institute for Supply Management