Austria: Manufacturing PMI dips into contractionary territory in August
August 29, 2022
The UniCredit Bank Austria Manufacturing Purchasing Managers’ Index (PMI) dropped from 51.7 in July to 48.8 in August. The index, therefore, moved below the neutral 50-threshold that separates an overall deterioration in conditions from an improvement in conditions, as compared to the prior month.
The drop was driven by steeper declines in output and new orders. Weakened demand dynamics also weighed on job creation and translated into an increase in stocks of finished goods. Turning to prices, the pace of input and output price inflation eased, but price pressures remained elevated. Lastly, pessimism regarding the outlook for the next 12 months increased. High energy prices and a general economic slowdown were reasons for concern.
On the general outlook for the sector, analysts at Erste Bank added:
“The war in Ukraine and the resulting sanctions against Russia will dampen the economic recovery in the coming months. […] High commodity and energy prices as well as supply chain issues will also negatively impact industrial production and slow investment growth.”