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

Tempe, Arizona, October 5th / PRNewswire / -- U.S. procurement and supply executives stated in the latest ISM ®Service Industry PMI ® report that economic activity in the service sector continued to expand in September. The Services PMI ® stood at 54.9%, remaining in the expansion zone for the 27th consecutive month.

This report was released today by Institute for Supply Management ® ( ISM ®), Chairman of the Service Industry Business Survey Committee, Steve Miller, CPSM, and CSCP. He stated: "In September, Services PMI ® was 54.9%, down 0.5 percentage points from 55.4% in August. Business Activity Index remained in an expansionary range in September, but it decreased from 61.7% in August to 56.5%, a drop of 5.2 percentage points. New Orders Index was 59.8%, 1.1 percentage points lower than 60.9% in August. Employment Index returned to the expansionary range for the first time after two consecutive months of contraction, with a reading of 50.1%, up 2.3 percentage points from 47.8% in August."

"Supplier Deliveries Index is at 53.2%, up 1.9 percentage points from 51.3% in August. This is the 22nd consecutive month that the index has been in an expansionary range, indicating a slowdown in supplier delivery speeds. (Supplier Deliveries is the only contrarian index in the ISM ® PMI ® report; a value above 50% indicates slower deliveries, which usually occurs when the economy is improving and customer demand is increasing.)"

"Prices Index has reached above 70% for the sixth consecutive time, and also for the sixth time in seven months; the reading for September was 74%, up 1.4 percentage points from August's 72.6%, and it reached its highest level since July 2022 (74.5%). The index has been above 60% for 22 consecutive months, and its 12-month average has risen by 0.5 percentage points to 69%, which is the highest since March 2023."

Inventories Index reached 57.8%, up 1.1 percentage points from 56.7% in August. Inventory Sentiment Index has been in an expansionary range for the 41st consecutive month, at 51.7%, down 2.4 percentage points from 54.1% in August. Backlog of Orders Index have also been in an expansionary range for the eighth consecutive month, rising to 56.6% in September from 55.6% in August. New Export Orders fell below 50% for the first time in eight months, at 46.9%, down 9.4 percentage points from 56.3% in August. Imports Index remained in an expansionary range for the third consecutive month, at 52.9% in September, down 3.4 percentage points from 56.3% in August.

In September, 13 industries showed growth, one more than the previous month; 4 industries reported contraction, one less than in August. In September, Services PMI ® was at 54.9%, which is 0.8 percentage points higher than the 12-month average of 54.1%. It also rose by 0.4 percentage points from the 12-month average of 53.7% in August, marking the ninth consecutive month of increase for this figure.

Miller continued to state: "In September, only timber and pork products were reported to have seen price declines, while fuel prices were reported to have risen for the eighth consecutive month. Oil-related products, diesel, and gasoline also saw price increases in September, and memory products experienced price hikes for the ninth consecutive month. The number of commodities in short supply increased from six to seven, with switchgear and computer-related products being the notable new additions." Supplier Deliveries Index continued to show a slowdown in deliveries, which rebounded to 53.2% after four consecutive months of decline, but still remained below the 12-month average of 53.7%.

“Employment Index is at 50.1%, returning slightly to the expansion range after two consecutive months of contraction, and it is also higher than its 12-month average of 49%. The indices for New Orders, Backlog, of, and Orders are also above their respective 12-month averages.”

Tariffs and fuel costs were the most frequently mentioned supply chain issues by respondents; in fact, fuel costs were mentioned twice as often as any other single issue. Supply chain constraints are also a major concern for respondents and affect delivery times and costs. For the first time in three months, the Employment Index has exceeded 50%, which seems to be related to an increase in backlogged orders, as well as higher levels of business activity and new orders. Despite a slowdown in the growth rate of business activity and new orders, the Backlog of Orders index has still risen to its highest level since July 2022 (58.3%).

Industry Performance

The 13 service industries that reported growth in September, in order, are: wholesale trade; real estate, leasing, and renting; other services; public administration; retail trade; educational services; utilities; information; transportation and warehousing; finance and insurance; accommodation and food services; healthcare and social assistance; and professional, scientific, and technical services. The 4 industries that reported contraction in September are: agriculture, forestry, fisheries, and hunting; mining; construction; and corporate management and support services.

What do the respondents have to say?

• The high cost of diesel has significantly increased freight costs. The heavy consumption of diesel during the harvest season also puts pressure on farmers. High crude oil prices have pushed the price of nitrogen fertilizers (used for agricultural purposes) close to record highs. [Agriculture, Forestry, Fisheries, and Hunting]
• Interest rates continue to keep buyers out of the market. Half of those who manage to enter the market are not eligible to purchase a home. [Architecture]
• Increasing deposit competition and higher financing costs are squeezing profitability and dampening growth expectations. Despite the revised forecasts, the bank still expects modest growth in both loans and deposits. [Finance and Insurance]
• "Received communication from suppliers regarding additional fuel surcharges and the possible reinstatement of tariffs." [Healthcare and Social Assistance]
• "The demand from commercial customer groups remained stable in September, although customers are still cautious about the decision-making cycle for discretionary capital projects. Wage pressures and software license renewals continued to slightly increase operating costs, but the delivery cycles for freight and consumable materials have returned to normal." [Information]
• "Oil and natural gas prices remain high, which encourages more production." [Mining]
• "Fuel costs continue to affect the cost of the services we provide." [Other Services]
• The cost of sea freight containers from overseas has doubled, leading to price increases. [Retail Trade]
• "Business activities remain strong, but the supply chain situation remains challenging. The supply of utilities and materials has slowed down, and it is particularly difficult to procure steel domestically. We are increasingly forced to purchase internationally to ensure we can obtain the materials we need. Strong business demand is putting additional pressure on supplies, leading to extended delivery times, material availability issues, and delays in project commencement." [Utilities]
• "The demand is still very strong. Manufacturers hardly have any room to keep up with it, and in some cases, the usual delivery times have been extended. They are no longer as aggressive about every opportunity, nor are they eager to compete for business by cutting prices. Nowadays, it has become the norm for commodity products (copper, aluminum, and polyvinyl chloride) to see price increases on a weekly basis. We continuously stay in touch with all our suppliers to ensure we can obtain the products to meet customer needs." [Wholesale Trade]

The Business Activity, New Orders, Employment, and Prices indices in ISM ® Services PMI ® Report have undergone seasonal adjustments. The New Orders, Production, Employment, and Inventories indices in ISM ® Manufacturing PMI ® Report have also undergone seasonal adjustments.

* indicates the number of months that the current direction has continued.

Price increases/decreases and shortage of goods mentioned in the report

Goods with rising prices

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.

Products with falling prices

Lumber *; as well as Pork Products.

In short supply goods

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

Note: The number in parentheses after the product name indicates the number of consecutive months that the product has been mentioned.

Summary of the Service Sector Index for September 2026

Services PMI ®

In September, the Services PMI was at 54.9%, which is 0.8 percentage points higher than its 12-month moving average of 54.1%. A value above 50% indicates overall expansion in the service sector economy; a value below 50% indicates overall contraction.

In the long run, a Services PMI ® above 48.1% typically indicates overall economic expansion. Therefore, the Services PMI ® in September signifies that the economy has been expanding for a consecutive 76th month. The Miller states: "The historical relationship between Services PMI ® and the overall economy shows that the Services PMI ® (54.9%) in September corresponds to an annualized growth of 2.1 percentage points in real gross domestic product ( GDP )."

Services PMI ® History

Business Activities

ISM ®'s Business Activity Index continued to expand in September; the reading of 56.5% was 5.2 percentage points lower than August's 61.7%. The September reading was 0.2 percentage points lower than the index's 12-month moving average of 56.7%; however, its 12-month moving average increased by 0.5 percentage points from August's 56.2%. Respondents commented on "urgent needs related to AI and cybersecurity" and "housing sales are slowing down as mortgage loan rates rise and inventory decreases."

The 12 industries that reported an increase in business activity in September, in order, are: Other services; Public administration; Retail trade; Information; Transportation and warehousing; Real estate, leasing, and renting; Wholesale trade; Public utilities; Educational services; Finance and insurance; Professional, scientific, and technical services; and Healthcare and social assistance. The 3 industries that reported a decline in business activity in September are: Accommodation and food services; Agriculture, forestry, fishing, and hunting; and Construction.

New Order

ISM ®'s New Orders Index remained in an expansionary range in September, reporting 59.8%, which is 1.1 percentage points lower than 60.9% in August. This index has been expanding for 16 consecutive months. Comments from respondents included: "Order volumes increased by 9.2%, mainly driven by wholesale stocking up before holidays" and "Reservations decreased."

The 13 industries that saw an increase in new orders in September, in order, are: real estate, leasing and renting; wholesale trade; retail trade; public administration; other services; utilities; healthcare and social assistance; educational services; corporate management and support services; finance and insurance; information; transportation and warehousing; and professional, scientific, and technical services. For the second consecutive month, the only industry that reported a decline in new orders in September is construction.

Employment

Service sector employment activities returned to an expansionary range in September, with the index at 50.1%. This reading is up 2.3 percentage points from 47.8% in August and 1.1 percentage points higher than the 12-month average of 49% for this index. Comments from respondents included: "Filling positions that became vacant due to promotions or retirements" and "Reorganizing due to increased efficiency achieved by using AI tools."

The 7 industries that saw an increase in employment in September, in order, are: Accommodation and food services; Wholesale trade; Educational services; Real estate, leasing, and renting; Transportation and warehousing; Retail trade; and Professional, scientific, and technical services. The 8 industries that saw a decrease in employment in September, in order, are: Corporate management and support services; Mining; Agriculture, forestry, fisheries, and hunting; Healthcare and social assistance; Construction; Public utilities; Finance and insurance; and Public administration.

Supplier delivery

In September, for the 22nd consecutive month, there was a slowdown in deliveries. The index stood at 53.2%, up 1.9 percentage points from 51.3% in August. A value above 50% indicates slower deliveries, while a value below 50% indicates faster deliveries. Respondents commented, "There are more backlogged orders" and "Due to tariffs-related delays, suppliers' delivery cycles are extending."

The 11 industries that saw a slowdown in deliveries in September, in order, are: Accommodation and food services; Public utilities; Construction; Healthcare and social assistance; Corporate management and support services; Finance and insurance; Wholesale trade; Information; Public administration; Professional, scientific, and technical services; and Transportation and warehousing. The only industry that reported an acceleration in deliveries in September was retail trade. Another 6 industries reported no change in deliveries.

Inventory

Inventories Index has continued its expansion for the eighth consecutive month, reporting a growth of 57.8%, which is an increase of 1.1 percentage points from 56.7% in August. Among the respondents in September, 29% stated that they either had no inventory or did not measure their inventory. Comments from respondents included: "Additional inventory purchases to hedge against rising prices" and "Lower inventory levels due to declining timber prices and negotiated price reductions."

The 9 industries that saw an increase in inventory in September, in order, are: Public Administration; Other Services; Professional, Scientific, and Technical Services; Real Estate, Leasing, and Renting; Educational Services; Transportation and Warehousing; Wholesale Trade; Construction; and Healthcare and Social Assistance. The 2 industries that saw a decrease in inventory in September are: Agriculture, Forestry, Fishing, and Hunting; and Retail Trade. Additionally, 7 industries reported no change in inventory.

Price

Service industry organizations paid prices for materials and services that rose for the 112th consecutive month in September. The increase was 74%, up 1.4 percentage points from 72.6% in August. The September figure was the highest since July 2022 (74.5%).

In September, there were 17 industries that reported increases in payment prices, in the following order: corporate management and support services; transportation and warehousing; agriculture, forestry, fisheries, and hunting; other services; real estate, leasing, and renting; public utilities; construction; professional, scientific, and technical services; accommodation and food services; information; public administration; wholesale trade; education services; mining; finance and insurance; healthcare and social assistance; and retail trade. No industry reported a decrease in payment prices.

Note: Commodities reported to have experienced price increases and decreases are listed in the commodities section of this report.

Backlog Orders

ISM ® Services Backlog of Orders Index reached 56.6%, up 1 percentage point from 55.6% in August. This index has been in an expansionary range for eight consecutive months, marking the longest consecutive expansion since the 26-month growth period that ended in February 2023. Among respondents in September, 31% stated that they do not take into account backlogged orders. Comments from respondents included: "Tariffs continue to affect the time it takes us to obtain equipment; delivery cycles are longer, and any additional costs will impact profit margins" and "The workload has already exceeded the number of staff available."

The 10 industries that saw an increase in backlogged orders in September, in order, are: Other services; Real estate, leasing, and renting; Finance and insurance; Retail trade; Educational services; Transportation and warehousing; Healthcare and social assistance; Professional, scientific, and technical services; Public utilities; and Wholesale trade. The 4 industries that saw a decrease in backlogged orders in September are: Corporate management and support services; Information; Agriculture, forestry, fisheries, and hunting; and Construction.

New export orders

Services provided by domestic U.S. companies and orders for other non-manufacturing activities outside the United States declined in September. New Export Orders Index was at 46.9%, a decrease of 9.4 percentage points from 56.3% in August. Among those surveyed in September, 39% stated that they did not undertake or separately measure orders for work outside of the U.S. Comments from respondents included: "Growth in Latin America and the Asia-Pacific region" and "Uncertainty due to delayed deliveries and increased surcharges."

The three industries that saw an increase in new export orders in September were: retail trade; healthcare and social assistance; and wholesale trade. The six industries that experienced a decline in new export orders in September, in order, were: accommodation and food services; public administration; information; finance and insurance; professional, scientific, and technical services; and utilities. In September, there were also nine industries where exports remained unchanged.

Import

Imports Index entered an expansionary period for the third consecutive month in September, and this is also the sixth time in seven months. The rate reached 52.9%, which is 3.4 percentage points lower than 56.3% in August. Among the respondents in September, 37% stated that they do not use or do not track the usage of imported materials. Comments from respondents included: "Canadian canola meal is no longer competitive" and "Changes in tariffs between the US and Canada affect imports and exports."

The 6 industries that saw an increase in imports in September, in order, are: public administration; retail trade; information; professional, scientific, and technical services; utilities; and wholesale trade. The 3 industries that saw a decrease in imports in September are: accommodation and food services; agriculture, forestry, fisheries, and hunting; and education services. Additionally, 9 other industries reported no change in imports.

Inventory sentiment

ISM ® Services Inventory Sentiment Index has been in an expansion (or "too high") range for the 41st consecutive month in September; the index is at 51.7%, down 2.4 percentage points from 54.1% in August. This reading indicates that respondents believe their companies' inventory levels are higher than business needs require.

The 9 industries that considered inventory to be too high in September, in order, are: mining; accommodation and food services; other services; wholesale trade; public utilities; public administration; education services; transportation and warehousing; and retail trade. The 4 industries that saw a decline in inventory sentiment in September are: agriculture, forestry, fisheries, and hunting; corporate management and support services; professional, scientific, and technical services; and information.

About this report

Do not confuse this national report with the regional procurement reports issued throughout the United States. The information in the national report reflects the entire United States, while regional reports mainly contain data for local areas. The information in regional reports is not used to calculate the results of the national report either. The information compiled in this report corresponds to September 2026.

The data in this report comes from a survey of senior executives in the service industry, based on information they have collected within their respective organizations. Apart from what is stated in this press release, ISM ® makes no claims regarding the data collection procedures of individual companies. When using these data to make decisions, it should be compared with all other sources of economic data.

Data and Presentation Methods

ISM ® Services PMI ® Report (formerly known as Non - Manufacturing ISM ® Report On Business ®) is based on data compiled by senior executives in national procurement and supply. Members of Services Business Survey Panel (formerly known as Non - Manufacturing Business Survey Committee) are diversified according to the North American Industry Classification System (NAICS), and are allocated based on each industry's contribution to Gross Domestic Product (GDP). The responses from the survey panel are divided into the following NAICS code categories: agriculture, forestry, fisheries, and hunting; mining; utilities; construction; wholesale trade; retail trade; transportation and warehousing; information; finance and insurance; real estate, leasing, and renting; professional, scientific, and technical services; corporate management and support services; education services; healthcare and social assistance; arts, entertainment, and leisure; accommodation and food services; public administration; and other services (such as equipment and machinery maintenance; promotion or management of religious activities; fundraising; advocacy; as well as providing dry cleaning and laundry services, personal care services, funeral services, pet care services, photography and printing services, temporary parking services, and dating services). These data are weighted according to each industry's contribution to GDP. According to estimates by the Bureau of Economic Analysis (BEA) (BEA) (the average of the 2024 fourth-quarter GDP estimate and the estimates for the first, second, and third quarters of 2025 GDP, all released on January 22, 2026), the six major service sectors are: real estate, leasing, and renting; public administration; professional, scientific, and technical services; healthcare and social assistance; information; and finance and insurance.

The survey responses reflect the changes from the previous month to the current month. For the various indicators measured ( Business Activity, New Orders, Backlog, of, Orders, New Export Orders, Inventory Change, Inventory Sentiment, Imports, Prices, Employment, and Supplier Deliveries ), this report presents the percentage of each response as well as the diffusion index. The responses represent the raw data and will not be altered in any way. The data for Business Activity, New Orders, Prices, and Employment have been adjusted for seasonality. All seasonal adjustment factors are subject to minor adjustments annually when necessary. No significant seasonality has been observed in the remaining indices.

Services PMI ® is a composite index based on four indicators, with each indicator having equal weight: Business Activity (after seasonal adjustment), New Orders (after seasonal adjustment), Employment (after seasonal adjustment), and Supplier Deliveries. The diffusion index has the characteristics of a leading indicator and serves as a convenient summary indicator that shows the direction and range of changes. An index value above 50% indicates overall expansion in the service sector economy; below 50%, it indicates overall contraction. Supplier Deliveries is an exception. A Supplier Deliveries Index value above 50% indicates slower delivery, while a value below 50% indicates faster delivery.

In the long run, a Services PMI ® level above 48.1% indicates that the overall economy or gross domestic product ( GDP ) is generally in an expansionary state; below 48.1%, it is usually in a contractionary state. The distance from 50% or 48.1% reflects the intensity of the expansion or contraction.

ISM ® Services PMI ® Report The survey is sent to the Services Business Survey Panel respondents in the first ten days of each month. Respondents are asked to report only on the current month's business situation in the United States. ISM ® Survey responses are received for most of the month, and most respondents usually wait until the end of the month to submit them in order to more accurately reflect the current business activities. ISM ® The reports are then compiled and published on the third working day of the following month.

The industries reported to be growing in ISM ® Services PMI ® Report are listed in descending order of growth rate. For industries that are reported to be contracting or declining, they are listed in descending order of the degree of contraction/decline.

ISM PMI ® Content

Institute for Supply Management ® (“ISM ®”) PMI ® Report, formerly known as Report On Business ® (Manufacturing and Services Report) (“ISM PMI ®”), contains information, text, files, images, videos, sounds, musical works, writings, applications, and any other materials or content (“Content” in general) (“ISM PMI ® Content”). ISM PMI ® Content is protected by copyright, trademarks, trade secrets, and other laws; between you and ISM, ISM owns and retains all rights to ISM PMI ® Content. ISM hereby grants you a limited, revocable, non-transferable license to access and display ISM PMI ® Content (excluding any software code) on your personal device for personal, non-commercial use only. ISM PMI ® Content also includes content from users and other ISM licensors. Except as explicitly permitted in this press release or with written permission from ISM, you shall not copy, download, stream, scrape, reproduce, archive, upload, modify, translate, publish, broadcast, transmit, retransmit, distribute, perform, display, sell, or otherwise use any ISM PMI ® Content.

Except as explicitly permitted by ISM, it is strictly prohibited to create or produce any works or materials derived from or based on the content of ISM PMI ® (including but not limited to tables, charts, data streams, time series variables, fonts, icons, link buttons, wallpapers, desktop themes, online postcards, collages, mashups, and similar videos, greeting cards, and unauthorized merchandise). This prohibition applies whether such derivative works or materials are sold, exchanged, or given away. You shall not directly or through any device, software, website, web-based service, or other means remove, modify, circumvent, avoid, interfere with, or bypass any copyright, trademark, or other proprietary notices indicated on the content, as well as any digital rights management mechanisms, devices, or other content protection or access control measures related to the content, including geographic filtering mechanisms. Without prior written authorization from ISM, you shall not use this content to establish a business, whether for profit or not.

Without prior written authorization, you are not permitted to create, recreate, distribute, or include any part of this content in other works or promotional materials. If you wish to copy or distribute the content of ISM PMI ®, please contact us in writing at: ISM Research, Institute, for, Supply Management, 350 W. Washington St, Suite 301, Tempe, AZ 85288-1495, or send an email to [email protected]; subject: Content Request.

ISM assumes no responsibility or liability for the content of ISM PMI, any errors, inaccuracies, omissions, or delays in providing any ISM PMI content, nor for any actions taken based on such content. Under no circumstances shall ISM be liable for any special, incidental, or consequential damages arising from the use of ISM PMI. Report On Business®, PMI®, Manufacturing PMI®, and Services PMI® are registered trademarks of Institute for Supply Management®. Institute for Supply Management® and ISM® are registered trademarks of Institute for Supply Management, Inc.

Regarding Institute for Supply Management ®

ISM is the world's first professional supply chain association, established in 1915, prior to the widespread use of the term "supply chain." We did not enter this industry; rather, we helped to shape it. Today, we have a community of over 200,000 professionals from more than 100 countries – including early-career practitioners building their qualifications, senior leaders seeking strategic insights, and organizations' procurement teams dedicated to driving business forward. What connects us is a shared belief: supply chain management is a strategic endeavor that deserves world-class support. For more information, please visit: https :// www.ismworld.org.

ISM ® Services PMI ® Report The full text will be published on the ISM ® website www.ismrob.org on the third working day of each month, after 10:00 a.m. Eastern Time. The only exception is January, when the report is published on the fourth working day of that month.

The next report containing data for October 2026, ISM ® Services PMI ® Report, will be released on Wednesday, November 4, 2026, at 10:00 a.m. Eastern Time in the United States.

*Unless the New York Stock Exchange is closed.