US private sector growth hits four-year high as services surge

21st Aug 2026 15:10

(Sharecast News) - US business activity strengthened in August, with S&P Global's flash manufacturing, services and composite PMIs pointing to the fastest pace of private‑sector growth in more than four years.

The composite PMI rose to 56.0 from 54.5, a 52‑month high, driven by a sharp acceleration in the services PMI, which climbed to 56.8, its strongest reading in 20 months, while manufacturing was more subdued, with the headline PMI easing to 53.2 and output slipping to a 13‑month low of 51.9.

S&P Global said the sector split reflected a revival in services activity offsetting a cooling in factory output, where reduced inventory building and renewed supply delays weighed on momentum.

Supplier delivery times lengthened markedly, contributing to rising backlogs across both sectors, while employment picked up at the fastest rate since early 2025 as firms responded to fuller order books and improved confidence.

Business expectations reached a nine‑month high, supported by stronger demand and easing concerns over tariffs and Middle East‑related disruption.

Price pressures moderated, with input cost inflation slowing to its weakest since the start of the conflict and selling‑price inflation easing to multi‑month lows across goods and services. Energy costs and supply constraints, however, continued to keep overall input inflation elevated by historical standards.

Overall, the data pointed to a solid acceleration in third‑quarter growth, albeit with manufacturing losing steam while services regained momentum.

Reporting by Iain Gilbert at Sharecast.com