Key facts
- US business activity reached a more than five-year high in September, with the S&P Global Composite PMI Output Index rising to 58.4.
- The PMI reading is consistent with the economy growing at around a 5% annualized rate.
- Supply chain bottlenecks are severe, with delays at their most widespread since July 2022.
- CFOs expect price increases to average 5.3% this year, up from 4.6% in the prior quarter.
- CFOs expect price increases to average 4.5% next year, up from 4.1% in the prior quarter.
- Monetary policy was the most cited issue among CFOs, with 20% listing it as a top concern.
US business activity surged to its highest level in over five years in September, fueled by a significant increase in new orders, according to S&P Global.
The flash US Composite PMI Output Index rose to 58.4, up from 56.0 in August, indicating robust expansion in both manufacturing and services sectors. This level is consistent with an annualized economic growth rate of approximately 5%, according to S&P Global.
However, the strong demand is exacerbating supply chain issues, leading to higher prices. The survey noted severe supply chain bottlenecks, with delays at their most widespread since July 2022, contributing to a jump in the index for prices paid by businesses for inputs to 66.4, the highest since October 2022.
In parallel, a US Federal Reserve survey revealed that Chief Financial Officers (CFOs) anticipate higher inflation, expecting price increases to average 5.3% this year and 4.5% next year, both up from previous forecasts. Rising interest rates were cited as a top concern by 20% of CFOs, making monetary policy the most frequently mentioned issue.