Preliminary data released by IHS Markit on Wednesday pointed to further solid growth in business activity during September, albeit one that was slightly weaker than seen in August.

According to the report, the Markit flash manufacturing purchasing manager's index (PMI) came in at 53.5 in September, up from 53.1 in August. That was the highest reading since January 2019. Economists had expected the reading to stay at 53.1. A reading above 50 signals an expansion in activity, while a reading below this level signals a contraction. The overall upturn was underpinned by a quicker rise in production at manufacturers, with a further increase in new orders and the resumption of operations at clients helping drive growth.

Meanwhile, the Markit flash services purchasing manager's index (PMI) fell to 54.6 in September from a 17-month high of 55.0 in the previous month. Nonetheless, the rate of expansion was the second-fastest since March 2019 and solid overall. Economists had expected the reading to drop to 54.7. The rate of new business growth was the strongest for 18 months, while employment continued to increase solidly, albeit at a softer pace than in August following a slower upturn in backlogs of work.

Overall, IHS Markit Flash U.S. Composite PMI Output Index came in at 54.4 in September, down slightly from 54.6 in August, signaling a strong expansion in the U.S. private sector’s business activity.

“US businesses reported a solid end to the third quarter, with demand growing at a steepening rate to fuel a further recovery of output and employment”, Chris Williamson, Chief Business Economist at HIS Markit noted. “The survey data, therefore, add to signs that the economy will have enjoyed a solid rebound in the third quarter after the second-quarter slump. The question now turns to whether the economy’s strong performance can be sustained into the fourth quarter.”