BUSINESS

Business Activity Booms to 4-Year High, Services Surge Offsets Iran War Drag

PUBLISHED Aug 22, 2026, 9:26 AM ET

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U.S. business activity accelerated in August to its fastest pace since April 2022, propelled by a strong expansion in the services sector that offset manufacturing headwinds caused by Middle East conflict. According to S&P Global’s flash purchasing managers' index released Friday, the composite output index rose to 56.0 from 54.5 in July. The services PMI jumped to 56.8, exceeding expectations and marking the highest reading since December 2024, driven by robust new business inflows and a 19-month high in hiring. Conversely, the manufacturing PMI fell to a five-month low of 53.2 as factory output and order growth cooled. S&P Global attributed the factory slowdown to reduced safety-stock building and supply chain disruptions linked to the ongoing war in Iran, which has constrained shipping lanes and elevated energy costs. Overall, survey data points to third-quarter annualized GDP growth approaching 3.0%, up from 1.5% in the second quarter.

By Lauren Mitchell | JQJO News

Timeline of Events

On April 2022, U.S. composite output index reached previous high growth mark.
On December 2024, Services PMI recorded levels comparable to recent expansion.
On July 2025, Employment growth hit a nineteen month high rate.
On July 2026, Composite output index was recorded at 54.5 points.
On August 21 2026, S&P Global released flash PMI data for August.
On August 21 2026, Composite index climbed to fifty six point zero.
On August 21 2026, Services PMI jumped to fifty six point eight.
On August 21 2026, Manufacturing index dropped to a five month low.
On September 1 2026, Final manufacturing PMI data is scheduled for publication.
On September 3 2026, Final services and composite indicators will be published.
Analysts expect third quarter annualized gross domestic product near three percent.
Economists project gradual stabilization of supply chains heading into next year.

News Intelligence

Economy gains robust momentum, boosting third-quarter gross domestic product.
Sustained energy inflation could complicate future federal reserve rate cuts.
Services providers, consumers, and financial markets navigate uneven sectoral growth.
Monitor upcoming final S&P Global and ISM economic survey releases.