Source: Sharecast
The S&P Global manufacturing purchasing managers’ index rose to 51.9 from 51.7 in August. A reading above 50.0 indicates expansion, while a reading below signals contraction. The PMI has now signalled expansion in each of the past 11 months.
Output growth, however, was the weakest in six months, with orders and exports growing only modestly. Rob Dobson, director at S&P Global Market Intelligence, said slower demand growth was to be expected given the higher energy prices seen during the month.
S&P said supply chains remained under "noticeable" stress, with a marked increase in average vendor delivery times last month. Supplier performance deteriorated to the greatest extent since June, reflecting the impacts of port congestion - both domestic and international - shipping delays, geopolitical tensions and resulting raw material shortages.
Stretched supply chains also exerted upward pressure on purchasing costs, with the rate of input price inflation accelerating for the first time in four months amid reports of higher costs for chemicals, electronics, energy and food stuffs.
Dobson said: "The big shift in September was in the survey's price measures, which switched from signalling a decline in inflationary pressures to a renewed uplift. After hitting conflict-driven highs earlier in the year, rates of increase in both input costs and factory gate selling prices accelerated for the first time since May. Energy and electronics prices remain especially elevated, while supply disruptions and rising diesel prices are now hitting transportation costs across industry. These price moves will be closely watched by the Bank of England for any signs of a more sustained and broader price uplift potentially taking hold.
"There are still some positive shoots of growth looking ahead, however, as manufacturers remain generally positive about the outlook. Almost half expect output to rise over the coming year. Confidence nevertheless remains subdued compared to that seen prior to the outbreak of the war in the Middle East, dampened not only by geopolitical issues but also reflecting uncertainty over policy direction at home. The upcoming Budget will therefore likely prove material in steering confidence."