Business conditions in the Austrian manufacturing sector moved into positive territory for the first time in three years in November, a new report by S&P Global and UniCredit Bank Austria has found.
The UniCredit Bank Austria Manufacturing PMI stood at 50.4 in November, up from 48.8 in October, as a rise in new orders was recorded for the first time since April 2022, alongside ‘solid and accelerated’ growth in production volumes.
At the same time, purchasing activity, backlogs and employment fell back, but at slower rates than in previous months.
Austrian manufacturers recorded a rise in output levels for the fifth time in the past seven months, with the rate of growth rising at the highest level for three-and-a-half years.
‘Stronger underlying demand’
‘The upturn in production was driven by stronger underlying demand,’ the report noted. ‘New orders rose only slightly, but this nevertheless ended the longest sequence of decline in the series’ history, which had stretched back to May 2022. Export sales likewise returned to growth, with surveyed firms commenting on higher demand in Germany and other parts of Europe.’
Employment declined again in November, with firms citing unfilled vacancies, restructuring and redundancies. While the pace of redundancies remained ‘solid’ by historical standards, it eased to its weakest level since August.
Many Austrian firms undertook efforts to streamline their inventories, the report noted, with some firms reporting efforts to align stock levels with production needs, while others noted that higher output required increased purchasing. At the same time, supplier delivery times lengthened for the sixth consecutive month.
Input prices
‘At the same time, there was sustained upward pressure on input prices, which rose for the fifth month in a row in November,’ the report noted. ‘Sources of cost inflation included energy, foodstuffs and integrated circuits, according to panel member reports. However, whilst ticking up since October, the rate of increase in input prices remained well below the long-run average.’
Looking ahead, Austrian manufacturers said that they were ‘confident’ that production levels would increase over the coming year. Read more here.
