News

The S&P Global Flash U.S. Manufacturing PMI slipped from 53 to 52 in September, a two-month low. However, it remained above the 50-point marker that signals growth in business conditions. Factory production rose as new orders increased for a ninth straight month. On the other hand, weak sales growth led inventories to rise at an unprecedented rate to the largest buildup of finished goods inventories in the 18 years of the survey. Meanwhile, supplier delivery times in September lengthened to the greatest degree in four months. Manufacturers’ input cost inflation remained elevated at one of the fastest paces since the pandemic. Meanwhile, selling prices for goods cooled to the slowest rate since January as manufacturing firms reported difficulties passing higher costs on to customers due to weak demand and growing competition. Tariffs were again overwhelmingly cited as the principal cause of further cost increases in September.

Overall business activity slowed to a three-month low, falling from 54.6 in August to 53.6 in September. Despite the weaker pace of growth, the third quarter as a whole has seen the strongest average monthly expansion since the fourth quarter of 2024, with output growing for 32 consecutive months. The services sector drove the increase in business activity in September, while the manufacturing sector grew at a weaker rate than in August. Overall, new order growth slowed despite exports rising for the first time since March. As with manufacturing, prices increased but at the slowest pace since April.

Meanwhile, optimism about future business conditions improved in September, partly reflecting the anticipated beneficial impact of lower interest rates and despite continued fears regarding tariff policies and broader political uncertainty. Furthermore, respondents remain hopeful that tariffs could stimulate domestic production in the coming year.