The S&P Global US Services PMI fell to 49.8 in March of 2026 from 51.7 in the previous month, revised lower from the preliminary estimate of 51.1, signaling the first contraction in the sector in over three years. The decline came amid the weakest growth in new business since April 2024, as firms cited reduced client confidence and softer demand, partly linked to the impact of the Middle East conflict.
Export activity also deteriorated further, with tariffs and geopolitical tensions weighing on trade. Business sentiment weakened to a five-month low as rising energy costs raised concerns over inflation and consumer spending. Employment edged lower for the first time since December, reflecting caution among firms. Input cost inflation accelerated to its highest level this year, driven largely by higher energy prices, while companies continued to pass on rising costs to clients, pushing selling price inflation to an eight-month high.
