This month's composite output index increased to 58.4 from 56 in August, marking a fourth straight monthly rise and the fastest growth rate in more than five years, according to the data provider. The consensus was for 55.3 in a survey compiled by Bloomberg. A score above 50 means expansion, while anything less represents contraction.
The index for services output jumped to 58.7 from 56.5 sequentially, hitting a 59-month high and topping Wall Street's expectations of 55.8. The manufacturing PMI reached a 52-month high of 57 in September, up from 53.9 last month and above the 53.7 consensus forecast.
"Historical comparisons suggest that the latest survey data point to annualized growth of around 5%, with a 4% gain now signaled for the third quarter as a whole," S&P Global Market Intelligence Chief Business Economist Chris Williamson said. "To put the growth surge in context, barring the spike in demand following the opening up of the economy after the COVID-19 lockdowns, the latest improvement in business activity is the greatest recorded since early 2015."
However, price pressures "intensified" this month as average input costs surged, driven by higher fuel and transport costs alongside a pickup in wage pressures, S&P said.
"Firms' input costs have, meanwhile, jumped in September at the steepest rate for four years, with fuel and transport costs spiking higher, thanks to the rise in oil prices seen during the month, which will add further to the upward pressure on selling prices and inflation in the coming months," Williamson said.
Last week, the Federal Reserve raised its benchmark lending rate by 25 basis points to combat sticky inflation, its first rate increase since 2023, while signaling another hike later this year.
Earlier this month, government data showed that US consumer inflation and producer prices hit three-month highs in August as energy costs rose amid intensifying conflict in the Middle East.
Backlogs rose in September, encouraging firms to step up hiring, with overall employment growth reaching its fastest pace since June 2022, S&P said Wednesday.
Business output expectations for the year ahead remained unchanged this month, with manufacturers more "upbeat" as service providers were weighed down by cost-of-living pressures, elevated borrowing costs, and political uncertainty, the report showed.
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