Business Activity Index at 56.5%; New Orders Index at 59.8%; Employment Index at 50.1%; Supplier Deliveries Index at 53.2%

TEMPE, Ariz., Oct. 5, 2026 /PRNewswire/ -- Economic activity in the services sector continued to expand in September, say the nation's purchasing and supply executives in the latest ISM® Services PMI® Report. The Services PMI® registered 54.9 percent, the 27th 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 September, the Services PMI® registered 54.9 percent, a decrease of 0.5 percentage point compared to August's figure of 55.4 percent. The Business Activity Index remained in expansion territory in September, decreasing 5.2 percentage points to 56.5 percent from August's reading of 61.7 percent. The New Orders Index registered 59.8 percent, 1.1 percentage points below August's figure of 60.9 percent. The Employment Index moved into expansion territory for the first time in three months with a reading of 50.1 percent, a 2.3-percentage point increase from the 47.8 percent recorded in August.

"The Supplier Deliveries Index registered 53.2 percent, 1.9 percentage points higher than the 51.3 percent recorded in August. This is the 22nd 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 sixth time in seven months; the reading of 74 percent in September is 1.4 percentage points above August's figure of 72.6 percent and the highest since July 2022 (74.5 percent). The index has exceeded 60 percent for 22 straight months, and its 12-month average increased by 0.5 percentage point to 69 percent, the highest since March 2023.

"The Inventories Index registered 57.8 percent, up 1.1 percentage points from August's figure of 56.7 percent. The Inventory Sentiment Index expanded for the 41st consecutive month, registering 51.7 percent, down 2.4 percentage points from August's figure of 54.1 percent. The Backlog of Orders Index remained in expansion territory for an eighth straight month, increasing one percentage point to 56.6 percent in September from August's reading of 55.6 percent. The New Export Orders dropped below 50 percent for the first time in eight months, registering 46.9 percent, a decrease of 9.4 percentage points from the 56.3 percent recorded in August. The Imports Index recorded a third straight month in expansion territory; the figure of 52.9 percent in September is a decrease of 3.4 percentage points compared to the 56.3 percent registered in August.

"Thirteen industries indicated growth in September, one more than the previous month, while four reported contraction, one fewer than in August. The September Services PMI® reading of 54.9 percent is 0.8 percentage point above the 12-month average of 54.1 percent. The uptick of 0.4 percentage point over August's 12-month average of 53.7 percent marks the ninth straight month that figure has increased."

Miller continues, "Lumber and pork products were the only commodities reported as down in price in September, with fuel reported as up in price for an eighth month in a row. Petroleum-related products, diesel and gasoline were again reported as up in price in September, as was memory products for the ninth month in a row. The number of commodities in short supply increased from six to seven, with switchgear and computers and related products being notable additions. The Supplier Deliveries Index continued to indicate slower performance, reversing a four-month decline with an increase to 53.2 percent but still below its 12-month average of 53.7 percent.

"The Employment Index (50.1 percent) returned to slight expansion after two months in contraction while also moving above its 12-month average of 49 percent. The New Orders and Backlog of Orders indexes were also above their 12-month averages.

"Tariffs and fuel cost impacts were the most cited issues impacting respondents' supply chains; in fact, fuel costs were mentioned twice as often as any other single issue impacting performance. Supply chain constraints were also a top concern of respondents and were impacting both lead times and costs. The Employment Index's first reading above 50 percent in three months seems to have resulted from increasing backlogs, as well as high levels of business activity and new orders. Although business activity and new orders growth rates have eased a bit, the Backlog of Orders index hit its highest level since July 2022 (58.3 percent)."

INDUSTRY PERFORMANCE

The 13 services industries reporting growth in September — listed in order — are: Wholesale Trade; Real Estate, Rental & Leasing; Other Services; Public Administration; Retail Trade; Educational Services; Utilities; Information; Transportation & Warehousing; Finance & Insurance; Accommodation & Food Services; Health Care & Social Assistance; and Professional, Scientific & Technical Services. The four industries reporting a contraction in the month of September are: Agriculture, Forestry, Fishing & Hunting; Mining; Construction; and Management of Companies & Support Services.

WHAT RESPONDENTS ARE SAYING

- "The high cost of diesel fuel has increased the cost of freight dramatically. The high cost is hard on farmers due to the high use of diesel fuel at harvest. The high cost of crude oil has driven nitrogen (for agronomic use) prices to near record highs." [Agriculture, Forestry, Fishing & Hunting]

- "Interest rates continue to drive buyers out of the market. Half of buyers walking through the door cannot qualify to purchase." [Construction]

- "Increased competition for deposits and higher funding costs are placing pressure on profitability and moderating growth expectations. Although projections have been revised downward, the bank continues to expect modest growth in both loans and deposits." [Finance & Insurance]

- "Had vendor communications about more fuel charges and possible tariff reinstatement." [Health Care & Social Assistance]

- "Demand across commercial client segments remains steady through September, though client decision cycles on discretionary capital projects remain cautious. Wage pressures and software licensing renewals continue to push operational expenses slightly higher, but freight and consumable material lead times have normalized." [Information]

- "Oil and gas prices are still high, which encourages more production." [Mining]

- "The cost of fuel continues to impact our cost of providing services." [Other Services]

- "Shipping containers from overseas are double the cost, causing price increases." [Retail Trade]

- "Business activity remains strong, but supply chain conditions continue to be challenging. Utilities and materials are experiencing slower availability, with steel particularly difficult to source domestically. We are increasingly having to place orders internationally to secure required materials. Strong business demand is putting additional pressure on supply, contributing to longer lead times, material availability issues and delays in project starts." [Utilities]

- "Demand remains very strong. Manufacturers have very little breathing room to keep up with demand, and in some cases, typical lead times have slipped. They are not as aggressive on all opportunities and eager to cut prices to secure business. Weekly price increases are the norm these days on commodities products (copper, aluminum and polyvinyl chloride). We are constantly reaching out to any and all suppliers we conduct business with to secure product to meet customer demand." [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

Aluminum Chlorohydrate; Contractors — Construction; Copper (10); Copper Based Products (2); Copper Wire; Diesel (7); Food Products (2); Fuel (8); Garage Doors; Gasoline (8); Labor; Lumber*; Memory Products (9); Office Supplies; Petroleum Based Products (5); Software — Licensing (8); Steel; Steel Products (6); Switchgear; and Wire and Cable.

Commodities Down in Price

Lumber*; and Pork Products.

Commodities in Short Supply

Computers and Related Products; Fuel; Memory Components (9); Solid State Drives (SSDs); Steel Products (4); Switchgear; and Wire and Cable (4).

Note: The number of consecutive months the commodity is listed is indicated after each item.

*Indicates both up and down in price.

SEPTEMBER 2026 SERVICES INDEX SUMMARIES

Services PMI®

In September, the Services PMI® registered 54.9 percent, 0.8 percentage point above its 12-month moving average of 54.1 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 September Services PMI® indicates the overall economy is expanding for the 76th straight month. Miller says, "The past relationship between the Services PMI® and the overall economy indicates that the Services PMI® for September (54.9 percent) corresponds to a 2.1-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 September; the reading of 56.5 percent is 5.2 percentage points lower than the 61.7 percent recorded in August.