The S&P Global Composite Purchasing Managers’ Index (PMI) fell to 48.4 in September from August’s 50.5. Consequently, the index moved below the 50-threshold, signaling contracting business activity over the previous month.
The S&P Global Services PMI fell to 48.5 in September from 50.6 in August. New orders fell in the month, and jobs were shed. On the price front, input cost inflation intensified, fanned by rising wages and higher prices for energy and fuels. In response, output inflation accelerated. Lastly, business confidence remained notably subdued, weighed down by worsening prospects for future growth.
Meanwhile, the S&P Global Manufacturing PMI fell to 49.0 in September from 49.9 in August. Both output and new orders contracted due to weak demand and high inflation, and more jobs were lost. Additionally, both input and output prices increased at faster paces than in August. On top of this, confidence slipped into negative terrain due to elevated inflation, the war in Ukraine and fears of recession.
Commenting on the Services PMI, Paul Smith, economics director at S&P Global, stated:
“Unsurprisingly, elevated inflation continues to undermine market demand and client budgets, with discretionary spending on services related to Hotels & Restaurants notably lower.”
FocusEconomics Consensus Forecast panelists project that GDP will expand 5.6% in 2022, which is down 0.3 percentage points from last month’s forecast, and 3.5% in 2023.