New Delhi, Oct. 4 -- The global manufacturing sector is sending an unusual signal: factories are getting busier even as an energy shock pushes up production costs.

S&P Global's latest global manufacturing survey shows factory activity expanded at its fastest pace in four and a half years in September. The Global Manufacturing Purchasing Managers' Index (PMI) rose to 53.0, its highest level since February 2022. Production recorded its strongest increase since July 2021, while new orders and global trade also picked up.

That would normally be encouraging news for the global economy. But there is a catch.

Oil and other energy costs are still feeding into transport, electricity and industrial inputs. Factory selling prices are rising at on...