(Bloomberg) -- US business activity expanded at a solid pace through most of October on resilient services demand, while expectations rebounded to a more than two-year high.
The S&P Global flash composite output index edged up 0.3 point to 54.3 despite a third straight month of declining factory output. Figures higher than 50 indicate expansion.
The group’s measure of expected output over the coming year jumped 8 points to the highest level since May 2022. That indicates service providers as well as manufacturers are more confident business spending will pick up after the November election.
Meanwhile, there was generally good news on the inflation front. While input costs remained elevated, the S&P Global composite measure of prices received dropped this month to a more than four-year low.
“Demand has also strengthened, as signalled by new order inflows hitting the highest for nearly one-and-a-half years, albeit with both output and sales growth limited to the services economy,” Chris Williamson, chief business economist at S&P Global Market Intelligence, said in a statement.
“Sales are being stimulated in part by more competitive pricing, which has in turn helped drive selling price inflation for goods and services down to the lowest since the initial pandemic slump in early 2020,” Williamson said.
Services growth edged up this month on an improvement in new business. That index climbed to the highest since April 2022, driven by a pickup in domestic demand.
At the same time, the composite measure of employment shrank for a third month and is just below the breakeven point.
The survey of businesses was conducted Oct. 10 to Oct. 23.
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