American Business Activity Hits a 62 Month High While Britain Slows and Prices Rise
Business activity in the United States grew in September at the fastest pace in more than five years and the euro area posted its strongest reading in nearly three and a half years, while the United Kingdom slowed to a three month low, according to the flash purchasing managers indexes published on Wednesday. Every one of the surveys reported faster input cost inflation, with fuel and energy named as the common cause.
The United States is the outlier on the upside
The American composite output index rose to 58.4 from 56.0, the highest since July 2021, with services at 58.7 and the manufacturing index at 57.0, a 52 month high. Employment rose at a pace not seen since June 2022, backlogs grew at the sharpest rate since May 2022 and supplier delays were the most widespread since July 2022. Input cost inflation reached its highest since October 2022, which the survey blamed on higher fuel and transport costs, with wage pressure also picking up. The compiler put the readings at annualised growth of about 5 percent, and a gain of about 4 percent for the third quarter as a whole.
| Economy | Composite output index, September | Previous month |
|---|---|---|
| United States | 58.4, a 62 month high | 56.0 |
| Euro area | 53.1, a 41 month high | 52.0 |
| Germany | 53.8, an 11 month high | 51.8 |
| France | 51.2, a 25 month high | 48.5 |
| United Kingdom | 51.7, a 3 month low | 52.5 |
S and P Global flash purchasing managers indexes for September 2026, published 23 September 2026. Data were collected from 10 to 21 September, and to 22 September for the United States.
Europe recovers, Britain does not
The euro area composite rose to 53.1 on a third consecutive monthly expansion, with services at a ten month high and manufacturing output at a 55 month high. New export orders rose for a second month after falling in each of the 53 months before August, and backlogs increased for the first time since June 2022. German services returned to growth at 52.9 after five months of contraction, and French activity expanded for the first time in ten months. Input costs and output prices across the euro area rose at the sharpest rates in four months. In the United Kingdom the composite fell to 51.7, new work fell fractionally, export sales fell at the fastest rate since June and employment fell again, extending an uninterrupted run of private sector job losses to two years, while input cost inflation hit a three month high on energy, fuel and raw materials.
Why it matters: these surveys are the first read on September, and they point the same way on prices even where they disagree on growth. For the Gulf, the mix matters more than the level: American demand running this hot alongside the highest input cost inflation since October 2022 adds to the case for the Federal Reserve staying restrictive, a stance that transmits into most of the Gulf through the dollar pegs, while Kuwait retains some room through the dinar’s currency basket.
Outlook: the readings land ahead of the next European Central Bank meeting and the autumn Budget, which the compiler cites as a source of uncertainty for British firms, and the composite indexes are consistent with quarterly growth of about 0.4 percent in the euro area and about 0.1 percent in the United Kingdom, on the survey compiler’s own estimates.
Sources: S and P Global.
