Factory activity in the central United States expanded at its fastest pace in more than a year in September, adding to a series of economic indicators pointing to stronger business activity heading into the fourth quarter.

The Federal Reserve Bank of Kansas City’s manufacturing composite index climbed to 14 in September from 10 in August and 9 in July. Any reading above zero indicates expansion. The September result was stronger than economists had expected and represented the fourth consecutive month of double-digit or near-double-digit growth.

Demand was a major driver of the improvement. The new-orders index jumped to 24 from 16, while the backlog-of-orders measure rose to 13 from 4. Production increased to 20 and shipments reached 21. Every month-over-month component of the survey was in positive territory.

The Kansas City Fed said growth was broad-based across both durable and nondurable goods manufacturers, with plastics and rubber producers and furniture-related businesses among the strongest performers. Manufacturers also reported longer workweeks, with the average-workweek index rising sharply from 1 to 13.

The survey covers manufacturers in Colorado, Kansas, Nebraska, Oklahoma, Wyoming, northern New Mexico and western Missouri. Supplier delivery times also lengthened, which can be another indication that manufacturers are dealing with stronger demand.

The regional report followed a separate S&P Global survey showing that overall U.S. private-sector business activity accelerated in September. The flash composite PMI rose to 58.4 from 56.0 in August, its strongest reading since July 2021, while manufacturing activity climbed to 57.0 from 53.9. S&P Global said new orders and output were also strengthening.

The manufacturing gains have not translated into equally strong hiring. The Kansas City Fed’s employment index remained at zero for a second consecutive month. Some manufacturers said they were turning to automation instead of adding workers as orders increased, highlighting the difference between rising production and employment growth.

Factory managers nevertheless remained optimistic about the months ahead. The Kansas City Fed’s index of expected activity six months from now was 19, only slightly below August’s 20, while expected production remained at 36 and expected new orders stood at 31. The September survey was conducted from Sept. 16 through Sept. 21 and received 101 responses.

The stronger manufacturing data provide another indication that business activity was gaining momentum as the third quarter ended, although elevated input costs and limited hiring remain factors manufacturers are monitoring.