S&P Global Says Business Activity Growth Slows but Remains ‘Robust’

U.S. business activity continued growing in September, though the rate of growth slowed for the second consecutive month, S&P Global said Tuesday (Sept. 23).

The company’s Flash U.S. Composite PMI Output Index slipped from 54.6 in August to 53.6 in September, with growth slowing in both the manufacturing sector and the service sector, it said in a Tuesday press release.

While the rate of growth slowed, the PMI, or Purchasing Managers’ Index, reading remained elevated and the third quarter as a whole saw the strongest average monthly expansion since the fourth quarter of 2024, according to the report.

Chris Williamson, chief business economist at S&P Global Market Intelligence, said in the release that growth remained “robust” in September but that it slowed from the recent peak seen in July.

S&P Global also found that companies’ expectations about output in the year ahead rose to a four-month high in September, though they remained below the long-run averages.

Sentiment in the service sector reached the highest level since May, while that in the manufacturing sector was the highest in three months, according to the report.

“While growth expectations across both manufacturing and services also continue to be dogged by concerns over the political environment, and especially tariffs, September encouragingly saw business sentiment improve in part due to the anticipated beneficial impact of lower interest rates,” Williamson said.

The Census Bureau reported Sept. 16 that retail sales posted a stronger-than-expected gain in August, helped in part by back-to-school shopping.

The data showed that advance estimates of retail and food service sales in the United States in August, adjusted for seasonal variation and holiday and trading-day differences but not for price changes, were up 0.6% from the previous month and up 5% from August 2024.

The National Federation of Independent Businesses reported Sept. 9 that small business sentiment rose in August, with its Small Business Optimism Index gaining 0.5 points to reach 100.8.

The number of business owners anticipating higher sales climbed 6 points to 12%, though their worries about labor shortages persisted.

“While owners have cited an improvement in overall business health, labor quality remained the top issue on Main Street,” NFIB Chief Economist Bill Dunkelberg said in a press release.