A worker uses a grinder on a metal door at the Metal Manufacturing Co. facility in Sacramento, Calif., in May. (David Paul Morris/Bloomberg)
September 23, 2025 10:47 AM, EDT
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U.S. business activity expanded in September at the slowest pace in three months, while cooler demand limited the ability of companies to raise prices and offset tariffs.
The S&P Global flash September composite output index fell 1 point to 53.6, according to data released Sept. 23. Figures above 50 indicate expansion.
While the group’s measure of prices paid for materials climbed to a four-month high, the prices-received gauge retreated to the lowest level since April. Input prices in the service sector rose to the highest since May.
“Although tariffs were again cited as a driver of higher input costs across both manufacturing and services, the number of companies able to hike selling prices to pass these costs on to customers has fallen, hinting at squeezed margins but boding well for inflation to moderate,’’ Chris Williamson, chief business economist at S&P Global Market Intelligence, said in a statement.
September U.S. Manufacturing @SPGlobalPMI down to 52 vs. 52.2 est. & 53 prior; Services down to 53.9 vs. 54 est. & 54.5 prior … Composite down to 53.6 vs. 54 est. & 54.6 prior pic.twitter.com/pKhLxrkD78
— Liz Ann Sonders (@LizAnnSonders) September 23, 2025
A pair of S&P Global composite indexes showed the slowest growth in new orders and backlogs in three months. Measures of new business at service providers eased, while bookings at manufacturers barely expanded.
As a result, the group’s composite employment index slipped to a five-month low.
Slower sales growth for manufacturers also led to the biggest build-up in inventories of finished goods in data back to 2007, according to the report.
Nonetheless, companies were more upbeat about the demand outlook for the year ahead, boosted in part by prospects for lower interest rates. Manufacturers remained optimistic that higher tariffs will propel domestic production.
