(Bloomberg) -- US business activity is expanding at the fastest pace since April 2022 and the demand outlook has brightened in anticipation of incoming Trump administration policies.
The S&P Global flash November composite output index for service providers and manufacturers advanced to 55.3 from 54.1. A figure exceeding 50 indicates expansion. While driven largely by faster growth in services activity, manufacturers were the most upbeat about production over the coming year since April 2022.
The composite measure of future output advanced 1.6 points to the highest level since May 2022, building on October’s 6.4 increase, Friday’s report showed.
“The prospect of lower interest rates and a more pro-business approach from the incoming administration has fueled greater optimism, in turn helping drive output and order book inflows higher,” Chris Williamson, chief business economist at S&P Global Market Intelligence, said in a statement.
Declines in the group’s price measures were also more favorable. The composite index of prices charged by services and manufacturers slid to a more than four-year low of 50.8 this month. The index for service providers dropped to the lowest level since May 2020 and showed prices received in the largest part of the economy are barely rising.
Combined with a further slowdown in the growth of input costs, that’s good news for the Federal Reserve as it points “to consumer inflation running well below the Fed’s 2% target,” Williamson said.
The S&P Global gauge of manufacturing remained in contraction territory for a fifth month, while the services activity index improved to the highest level since March 2022.
“A concern is that growth remains heavily reliant on the services economy, with manufacturing production declining at an increased rate,” Williamson said. “However, the promise of greater protectionism and tariffs has helped lift confidence in the US good producing sector.”
The survey of businesses was conducted Nov. 12 to Nov. 21.
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