US business activity hits eight-month high as costs climb

Article originally posted on CoStar on July 24, 2026

Rising costs, supply-chain disruptions fueled the strongest inflation pressures since 2022

U.S. business activity reached an eight-month high in July, though rising costs and supply-chain disruptions clouded the outlook, according to S&P Global. (Getty Images)

American businesses picked up the pace in July, but so did inflation as companies grappled with higher shipping costs, supplier delays and the fallout from the conflict in the Middle East.

The S&P Global U.S. PMI Composite Output Index, a gauge of business activity across manufacturing and services sectors, rose to 53.6 in July from 51.9 in June, signaling the strongest economic momentum since November. Readings above 50 indicate expansion, while those below 50 signal contraction.

The robust activity also spurred hiring, with employment rising for the first time in three months, according to S&P Global.

Despite the upbeat reading, businesses faced mounting headwinds. Manufacturers reported the sharpest increase in supplier delivery times since August 2022 as shipping bottlenecks around the Strait of Hormuz drove companies to stockpile goods and materials, straining supply chains.

The trade challenges translated into higher costs. As a result, selling-price inflation accelerated to its fastest pace since August 2022 as businesses passed along higher shipping, energy and tariff-related expenses.

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