05-Feb-2026 07:59

January's S&P Global PMI survey of US private service sector companies signaled a quicker expansion of business activity. Stronger growth was linked to a steeper uplift of new work, although subdued consumer confidence and ongoing uncertainty served to limit gains. Moreover, service providers reported the steepest reduction in foreign demand in just over three years, whilst sentiment regarding the outlook softened, linked in some instances by firms to tariffs and political uncertainty.

That said, capacity pressures continued to build and encouraged service providers to lift staffing levels marginally. On the price front, cost pressures remained historically elevated driven principally by tariffs and higher labor and supplier costs. In response, services companies raised their own selling prices, but at a slightly softer rate.

The headline S&P Global US Services PMI Business Activity Index recorded 52.7 in January, up from 52.5 in December. Remaining above the crucial 50.0 no-change mark, the index has now signaled continuous service sector expansion for exactly three years. That said, growth in January was historically weak and below typical levels seen in 2025.

The S&P Global US Composite PMI recorded 53.0 in January. That was up from 52.7 in December and represented a solid rate of growth in private sector activity. Both sectors covered by the survey recorded stronger output expansions, in line with faster gains in new business. Employment meanwhile rose only marginally, while confidence in the outlook softened. Cost pressures remained elevated, although inflation weakened from the end of 2025. A similar trend was seen for output charges.

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