US Business Activity Experiences Significant Slowdown in December 2025

Composite PMI Dips to Six-Month Low

The growth of business activity in the United States slowed down considerably in December 2025, according to the latest S&P Global flash PMI data. The composite PMI decreased to 53.0 from November's 54.2, marking the weakest expansion in six months. This decline was driven by slower growth in both the manufacturing and services sectors.

Sectoral Breakdown Shows Widespread Weakness

The services sector, which accounts for approximately two-thirds of the US economic output, saw its PMI drop to 52.9 - the lowest level in six months - from 54.1 in November. This slowdown was mirrored in the manufacturing sector, where the PMI fell to 51.8, its lowest since July, down from 52.2 in the previous month. Both readings came in below economists' expectations as surveyed by Reuters.

New Orders Show Concerning Weakness

One of the most significant concerns highlighted by the survey was the slowdown in new orders. The rate of increase in new business was the smallest in 20 months, with manufacturing new orders actually declining for the first time in a year. This weakness in demand suggests that businesses are becoming increasingly cautious about future prospects.

Economic Implications of Slowing Business Activity

The deceleration in business activity growth as measured by the PMI indicates a more challenging economic environment as the US economy heads into 2026. While the PMI remains above the 50-mark that separates expansion from contraction, the slowing trend suggests that the strong growth seen earlier in 2025 is losing momentum. This data will likely be closely watched by policymakers and market participants for signs of further economic weakening or potential areas of support.