United States business activity growth slumped to an 11-month low in March due to weaker new orders and rising prices amid the Iran war.
S&P Global’s U.S. purchasing managers index composite output reading, which includes the manufacturing and services sectors, dropped from 51.9 in February to 51.4 in March.
“The flash PMI survey data for March signal an unwelcome combination of slower growth and rising inflation following the outbreak of war in the Middle East,” said S&P Global Market Intelligence chief business economist Chris Williamson.
“Companies are reporting a hit to demand from the additional uncertainty and cost of living impact generated by the conflict.”
Service sector activity growth also slumped to an 11-month low point. Falling orders were largely driven by an increasing rate of loss of export sales and lessening consumer confidence, S&P Global’s survey found.
In the manufacturing sector, output growth rose slightly, with new orders reporting their fastest growth rate in five months as export orders stabilised.
The Iran war was the primary cause of the month’s lengthening supplier delivery times, with supply delays more widely reported than in any month since October 2022.
Average input costs spiked to their fastest growth rate in 10 months as the war pushed up energy prices, and selling prices rose by the highest rate in nearly four years.
March’s PMI reading indicates a 1.3% increase in gross domestic product (GDP) during 2026’s first quarter, S&P Global projected. GDP rose by just 0.7% in 2025’s final quarter amid the 43-day government shutdown, but was up 4.4% in the year’s third quarter.
