Business Activity Index is 53.8%; New Orders Index is 55.9%; Employment Index is 51.4%; Supplier Deliveries Index is 56.7%.

Tempe, Arizona, USA, November 4th / PRNewswire / — US procurement and supply executives stated that economic activity in the service sector continued to expand in October. The latest ISM ® Services PMI ® report shows that the service sector PMI ® is at 54.5%, remaining in an expansionary range for the 28th 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 October, Services PMI ® was at 54.5%, a decrease of 0.4 percentage points from 54.9% in September. Business Activity Index remained in an expansionary range in October, but it fell from 56.5% in September to 53.8%, a decrease of 2.7 percentage points. New Orders Index was at 55.9%, 3.9 percentage points lower than 59.8% in September. Employment Index was in an expansionary range for the second consecutive month, with a reading of 51.4%, up 1.3 percentage points from 50.1% in September."

"Supplier Deliveries Index is at 56.7%, up 3.5 percentage points from 53.2% in September. This marks the 23rd consecutive month that the index has been in an expansionary range, indicating a slowdown in supplier delivery speeds. (Supplier Deliveries is the only counter-index in the ISM ® PMI ® report; a value above 50% indicates a slowdown in deliveries, which usually occurs when the economy is improving and customer demand is increasing.)"

“Prices Index has reached over 70% for the seventh consecutive time, and also for the seventh time in the past eight months. The reading for October was 73%, which is 1 percentage point lower than September’s 74%. This index has been above 60% for 23 consecutive months, and its 12-month average has risen by 0.2 percentage points to 69.2%, the highest since April 2023.”

Inventories Index is at 55.4%, a decrease of 2.4 percentage points from 57.8% in September. Inventory Sentiment Index has been in the expansion zone for the 42nd consecutive month, with a reading of 52.1%, up 0.4 percentage points from 51.7% in September. Backlog of Orders Index have also been in the expansion zone for the ninth consecutive month, rising to 58% in October from 56.6% in September, an increase of 1.4 percentage points. New Export Orders returned to the expansion zone after a month of contraction, with a reading of 55.2%, up 8.3 percentage points from 46.9% in September. Imports Index has been in the expansion zone for the fourth consecutive month, at 54.2% in October, up 1.3 percentage points from 52.9% in September.

In October, 15 industries showed growth, two more than the previous month; two industries showed contraction, two less than in September. In October, Services PMI ® was at 54.5%, which is 0.2 percentage points higher than the 12-month average of 54.3%. It also rose by 0.2 percentage points from the 12-month average of 54.1% in September, marking the tenth consecutive month of increase for this figure.

Miller continued to state: "In October, no commodities were reported to have seen price declines, while fuel prices rose for the ninth consecutive month. The prices of storage products increased for the tenth consecutive month, and storage components were reported to be in short supply. The number of commodities in short supply decreased from seven to three, all of which are related to computer technology. Supplier Deliveries Index also indicated that delivery times had slowed down, rising to 56.7% for the second consecutive month, which is 2.5 percentage points higher than the 12-month average of 54.2%."

“Employment Index (51.4%) has expanded for the second consecutive month, 2.1 percentage points higher than its 12-month average of 49.3%. The indices for New Orders, Business Activity, and Inventory Sentiment are below their respective 12-month averages, but for the first time since February 2026, all 10 indices are in an expansion zone.”

Tariffs and fuel costs remain the issues most frequently mentioned by respondents as affecting the supply chain. Many respondents stated that they have not yet seen the full impact of these cost increases or have not passed them on to their customers. This indicates that if the pressures of rising oil prices and tariffs cannot be alleviated, there will be more price pressures in the future, even if these costs do not continue to rise. Comments related to supply chain constraints have increased significantly month-on-month, with Backlog of Orders Index rising to 58%, the highest level since July 2022. At the same time, the number of products identified as in short supply has decreased from seven to three month-on-month. Employment Index has been above 50% for the second consecutive time, which may mean that the situation of slower supplier deliveries and increasing backlogs of orders will ease. Although the Backlog of Orders index has risen to its highest level since July 2022, the October Supplier Deliveries Index reading is the second-highest of this period, only below the 56.8% recorded in April 2026.

Industry Performance

The 15 service industries that showed growth in October, in order, are: Transportation and Warehousing; Wholesale Trade; Information; Retail Trade; Arts, Entertainment, and Leisure; Finance and Insurance; Other Services; Real Estate, Leasing, and Renting; Accommodation and Food Services; Agriculture, Forestry, Fisheries, and Hunting; Public Utilities; Educational Services; Corporate Management and Support Services; Professional, Scientific, and Technical Services; and Public Administration. The two industries that showed contraction in October are: Construction; and Healthcare and Social Assistance.

What do the respondents say?

• "The fuel and freight markets continue to exert pressure on distribution cost planning. The ongoing war in Ukraine, drought in the midwestern regions, and rising costs of fuel and fertilizers are driving up wheat prices (up 30% year-on-year)." [Accommodation and Food Services]
• "Overall demand is weak." [Agriculture, Forestry, Fisheries, and Hunting]
• "Activities remain stable, with a strong backlog of orders for institutional and commercial projects. The supply of materials has generally improved, but some mechanical and electrical equipment still needs to be procured in advance. Labor shortages and wage pressures continue to affect the market, while higher financing costs make owners more cautious in assessing project budgets and timelines. The overall outlook remains cautiously optimistic." [Construction Industry]
• Purchasing activities continue to be affected by rising costs of goods and services, especially in areas such as construction, facility maintenance, technology, and outsourcing services. Uncertainties surrounding tariffs, labor supply, and the broader economic situation continue to impact supplier pricing and procurement planning. Although the overall supply chain situation has stabilized compared to previous years, suppliers remain cautious regarding price commitments, and cost pressures continue to affect budgets. [Education Services]
• The usage of AI in our company is increasing, but we have put in place safeguards to limit the use of token and to evaluate the total cost of ownership (TCO). Diesel prices have affected our commercial truck business, and Hurricane Isaias has temporarily resulted in the suspension of underwriting for certain policies in parts of Alabama, Mississippi, and Florida. [Finance and Insurance]
• "Fuel prices are affecting many of our consumables and delivered goods. This has compressed our profit margins, as we haven't passed on this cost to our customers. We believe this is only a short-term situation." [Information]
• "Although business activities remain strong, tariffs, rising fuel prices, and longer delivery cycles are becoming increasingly challenging." [Company Management and Support Services]
• Tariffs are disrupting international commodity procurement. [Retail Trade]
• Strong demand for power generation. Limited supply of services, equipment, and materials. There are significant benefits to nuclear power capacity expansion (or increasing power generation capacity) and next-generation power plants, but they face regulatory obstacles. [Utilities]
• Tariff policies remain the main driving factor for cost at delivery: The tariffs under Section 301, which came into effect in late July, have replaced the previously existing uniform tariffs, increasing the costs for canned and dried goods imported from Southeast Asia. Shipping rates from Asia remain high and volatile, and congestion is expected at ports on the East Coast of the United States in November. El Niño is limiting the supply of fish, and we have temporarily suspended one source of supply. Some Asian suppliers have delayed deliveries by several weeks or even months, and have raised prices for beverage products while lowering those for other goods. Inventories are generally high but unevenly distributed, so there is still a shortage of certain products available. [Wholesale Trade]

The Business Activity, New Orders, Employment and Prices indices in the report have been seasonally adjusted. The New Orders, Production, Employment and Inventories indices in the report have also been seasonally adjusted.

The numbers in parentheses indicate the number of consecutive months that the product has been reported.

Rising/falling prices and shortages of goods

Goods with rising pricesAluminum; chicken; copper (11 months); diesel (8 months); equipment/equipment parts; food (3 months); fuel (9 months); gasoline (9 months); high-density polyethylene ( HDPE ); insurance; labor force (2 months); construction labor force; storage products (10 months); petroleum-based products (6 months); software licenses (9 months); software maintenance; steel products (7 months); vehicles; and wires and cables (2 months).

Products with falling prices: None.

In short supply goodsComputers and related products (2 months); storage components (10 months); as well as wires and cables (5 months).

Note: The numbers in parentheses after the product indicate the number of consecutive months it has been listed.

October 2026 Service Sector Index Summary

Services PMI ®

In October, Services PMI was at 54.5%, which is 0.2 percentage points higher than its 12-month moving average of 54.3%. A value above 50% generally 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 October signifies that the economy has been expanding for 77 consecutive months. The Miller states: "The historical relationship between Services PMI ® and the overall economy indicates that the Services PMI ® (54.5%) in October corresponds to a 2-percentage-point increase in real gross domestic product ( GDP ) after annual adjustment."

Service Industry PMI ® History

Business Activity

ISM ®'s Business Activity Index continued to expand in October, with a reading of 53.8%, which is 2.7 percentage points lower than September's 56.5%. The October reading is also 2.9 percentage points below the index's 12-month moving average of 56.7%, the same as in September. Respondents commented, "Very good movie content drove higher business volume" and "Increased business activity from both new and existing customers."

The 13 industries that showed an increase in business activity in October, in order, are: Arts, Entertainment, and Leisure; Finance and Insurance; Transportation and Warehousing; Information; Wholesale Trade; Accommodation and Food Services; Other Services; Educational Services; Retail Trade; Corporate Management and Support Services; Public Administration; Utilities; and Professional, Scientific, and Technical Services. The two industries that showed a decline in business activity in October are: Construction; and Real Estate, Leasing, and Renting.

New Orders

ISM ®'s New Orders Index remained in an expansionary range in October, at 55.9%, which is 3.9 percentage points lower than September's 59.8%. This index has been expanding for 17 consecutive months. Comments from respondents included: "New orders are growing at a moderate and slower pace; production remains stable with no significant surge" and "We must first sell off the excess speculative housing inventory before we can start new projects."

The 15 industries that showed an increase in new orders in October, in order, are: Transportation and Warehousing; Other Services; Arts, Entertainment, and Leisure; Wholesale Trade; Finance and Insurance; Information; Agriculture, Forestry, Fisheries, and Hunting; Real Estate, Leasing, and Renting; Retail Trade; Corporate Management and Support Services; Public Administration; Professional, Scientific, and Technical Services; Healthcare and Social Assistance; Educational Services; and Public Utilities. For the third consecutive month, the only industry that reported a decline in new orders is Construction.

Employment

Service sector employment activities expanded for the second consecutive month in October, with an index of 51.4%. This figure represents a rise of 1.3 percentage points from 50.1% in September and is also 2.1 percentage points higher than the 12-month average of 49.3% for this index. Comments from respondents included: "Increasing employees to support business growth and new contract awards" and "Fewer people, more work to do, which is frustrating."

The six industries that showed an increase in employment in October, in order, are: Transportation and Warehousing; Retail Trade; Real Estate, Leasing, and Renting; Accommodation and Food Services; Public Utilities; and Wholesale Trade. The seven industries that showed a decrease in employment in October, in order, are: Corporate Management and Support Services; Healthcare and Social Assistance; Other Services; Mining; Construction; Educational Services; and Public Administration.

Supplier Deliveries

In October, Supplier Deliveries Index showed a slowdown in deliveries for the 23rd consecutive month. The index stood at 56.7%, up 3.5 percentage points from 53.2% in September. A value above 50% indicates a slowdown in deliveries, while a value below 50% indicates an acceleration in deliveries. Respondents commented, "The supply of sub-components for technology products has become more stable" and "Shipments and supplier schedules have been repeatedly delayed (by several weeks to months), with multiple outstanding orders overdue; longer delivery cycles have forced us to place orders earlier and reschedule our plans."

The 14 industries that showed a slowdown in deliveries in October, in order, are: Corporate Management and Support Services; Wholesale Trade; Agriculture, Forestry, Fisheries, and Hunting; Information; Mining; Other Services; Real Estate, Leasing, and Renting; Public Utilities; Public Administration; Professional, Scientific, and Technical Services; Healthcare and Social Assistance; Construction; Educational Services; and Finance and Insurance. No industry reported an acceleration in deliveries in October.

Inventories

Inventories Index has continued to expand for the ninth consecutive month, with a growth rate of 55.4%, which is a decrease of 2.4 percentage points from 57.8% in September. In October, 30% of respondents indicated that they had no inventory or did not measure their inventory. Comments from respondents included: "We overpurchased to prevent price increases" and "We used new AI technology to conduct inventory analysis, comparing the lowest and highest inventory levels with demand; the adjustment recommendations helped us reduce our existing inventory."

The 10 industries that showed an increase in inventory in October, in order, are: retail trade; transportation and warehousing; agriculture, forestry, fisheries, and hunting; construction; other services; real estate, leasing, and renting; professional, scientific, and technical services; public utilities; education services; and wholesale trade. The 4 industries that showed a decrease in inventory in October are: arts, entertainment, and leisure; finance and insurance; public administration; and corporate management and support services.

Prices

Service industry organizations paid prices for materials and services that rose for the 113th consecutive month in October. The Prices Index decreased by 1 percentage point to 73%, from 74% in September. The October figure was 3.8 percentage points higher than its 12-month average of 69.2.

In October, there were 17 industries that reported an increase in payment prices, in order: Other services; Transportation and warehousing; Construction; Arts, entertainment, and leisure; Professional, scientific, and technical services; Information; Public administration; Corporate management and support services; Finance and insurance; Utilities; Accommodation and food services; Mining; Retail trade; Educational services; Healthcare and social assistance; Wholesale trade; and Real estate, leasing, and renting. No industry reported a decrease in payment prices.

Note: For the commodities with price increases and decreases listed in the report, please refer to the commodities section.

Backlog of Orders

ISM ® Services Backlog of Orders Index reached 58%, up 1.4 percentage points from 56.6% in September, marking the highest level since July 2022 (58.3%). The index has been in an expansionary range for nine consecutive months, which is the longest consecutive expansion since the 26-month growth period that ended in February 2023. In October, 33% of respondents stated that they did not measure order backlogs. Respondents' comments included: "Due to the need to hire more staff to meet demand, we have to make patients wait in line until medical staff are available" and "Limited supplier capacity and delivery delays are causing backlogs in the execution of some projects."

In October, there were 11 industries that showed an increase in order backlogs, which are, in order: Finance and Insurance; Arts, Entertainment, and Leisure; Real Estate, Leasing, and Renting; Retail Trade; Agriculture, Forestry, Fisheries, and Hunting; Corporate Management and Support Services; Mining; Professional, Scientific, and Technical Services; Wholesale Trade; Healthcare and Social Assistance; and Public Utilities. In October, there were 3 industries that showed a decrease in order backlogs: Transportation and Warehousing; Construction; and Other Services.

New Export Orders

U.S. domestic companies experienced a contraction in orders and demand for services provided outside the United States, as well as in other non-manufacturing activities, in October. New Export Orders Index rose to 55.2%, up 8.3 percentage points from 46.9% in September, returning to an expansionary range after a month of consecutive contraction. Forty percent of respondents in October stated that they do not engage in, or do not measure separately, business orders outside the U.S. Respondents' comments included: "Increased subscription demand" and "New service centers are being outsourced."

In October, the six industries that showed an increase in new export orders were, in order: real estate, leasing and renting; other services; retail trade; agriculture, forestry, fisheries, and hunting; professional, scientific, and technical services; and public utilities. The five industries that saw a decrease in new export orders in October were: construction; accommodation and food services; information; education services; and wholesale trade. Additionally, seven industries reported no change in exports in October.

Imports

Imports Index has been in an expansionary range for the fourth consecutive month in October, and for the seventh time in the past eight months, with a reading of 54.2%, up 1.3 percentage points from 52.9% in September. In October, 38% of respondents indicated that they do not use or do not track the usage of imported materials. Comments from respondents included: "Longer shipping times combined with higher energy costs have led to an increase in total shipping costs" and "We are actively trying to purchase more products from suppliers under the US-Mexico-Canada Agreement to mitigate the high tariffs on food, clothing, and electronic products from Asia."

In October, the 8 industries that showed an increase in imports were, in order: mining; public administration; retail trade; professional, scientific, and technical services; healthcare and social assistance; transportation and warehousing; wholesale trade; and utilities. The 2 industries that showed a decrease in imports in October were: accommodation and food services; and information. Additionally, 8 industries reported no change in imports.

Inventory Sentiment

ISM ® Services Inventory Sentiment Index has been in an expansion (or "too high") range for the 42nd consecutive month in October; the reading is 52.1%, up 0.4 percentage points from 51.7% in September. This figure indicates that respondents believe their company's inventory levels are higher than business needs.

The 7 industries that considered inventory to be too high in October, in order, are: retail trade; construction; other services; public utilities; wholesale trade; agriculture, forestry, fishing, and hunting; and healthcare and social assistance. The 3 industries that saw a decline in inventory sentiment in October are: finance and insurance; accommodation and food services; and professional, scientific, and technical services. Additionally, 8 industries reported no change in imports in October.

About this report

Please do not confuse this national report with the regional procurement reports issued in various parts of the United States. 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 summarized in this report corresponds to October 2026.

The data in this report comes from a survey of senior executives in the service industry, who answered based on information collected by their respective organizations. Apart from what is stated in this press release, ISM ® makes no claims regarding the data collection processes of individual companies. When using these data for decision-making, 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 aggregated 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 weighted based on each industry's contribution to Gross Domestic Product (GDP). The responses from the survey panel are divided into the following NAICS 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 dry cleaning and laundry services, personal care services, funeral services, pet care services, photography and printing services, temporary parking services, and dating services, etc.). The data is weighted according to each industry's contribution to GDP. According to estimates by the Bureau of Economic Analysis of the United States (BEA) (the average of the 2024 fourth-quarter GDP estimate and the estimates for the first, second, and third quarters of 2025 GDP, 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 each indicator 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. Business Activity, New Orders, Prices, and Employment have undergone seasonal adjustments. All seasonal adjustment factors are slightly adjusted annually when necessary. The remaining indices do not show significant seasonality.

Services PMI ® is a composite index based on four indicators with equal weights: Business Activity (seasonally adjusted), New Orders (seasonally adjusted), Employment (seasonally adjusted), and Supplier Deliveries. The diffusion index has the characteristics of a leading indicator and serves as a convenient summary indicator to show the direction and range of changes. A value above 50% indicates that the service industry economy is generally in expansion; a value below 50% indicates that it is generally in contraction. Supplier Deliveries is an exception. A value of Supplier Deliveries Index above 50% indicates a slowdown in deliveries, while a value below 50% indicates an acceleration in deliveries.

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 phase; below 48.1%, it is usually in a contractionary phase. The distance from 50% or 48.1% can reflect the strength 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 each month, and most respondents usually wait until the end of the month to submit them in order to reflect the current business activities as accurately as possible. ISM ® A report is then compiled and released on the third working day of the following month.

The industries that show growth are listed in descending order of growth rate. For industries that show contraction or decline, 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 ®, including reports on manufacturing and services) (“ISM PMI ®”) contains information, text, files, images, videos, sounds, musical works, writings, applications, and any other materials or content related to ISM (collectively referred to as “Content” (“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) only on your personal device, for personal, non-commercial use. ISM PMI ® Content may also contain content from users and other licensors of ISM. Except as explicitly permitted by these terms or explicitly licensed in writing by ISM, you shall not copy, download, stream, scrape, reproduce, duplicate, archive, upload, modify, translate, publish, broadcast, transmit, retransmit, distribute, perform, display, sell, or otherwise use any ISM PMI ® Content.

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Regarding Institute for Supply Management ®

ISM is the world's first professional supply chain association, established in 1915 when the term "supply chain" was not yet widely used. We did not enter this industry; rather, we helped to shape it. Today, we have over 200,000 professionals in more than 100 countries – ranging from early-career practitioners building their qualifications to senior leaders seeking strategic insights, as well as organizations that are training their procurement teams and driving business forward. What connects us is a shared belief: supply chain management is a strategic task 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 at 10:00 a.m. Eastern Time on the third working day of each month. The only exception is January, when the report is published on the fourth working day of that month.

The next report containing data for November 2026, ISM ® Services PMI ® Report, will be released on Thursday, December 3, 2026, at 10:00 a.m. Eastern Time in the United States.

*Unless the New York Stock Exchange is closed.