Austria: Manufacturing PMI falls further below neutral threshold in July
The UniCredit Bank Austria Manufacturing Purchasing Managers’ Index (PMI) fell to 43.1 in July from June’s 43.6. As a result, the index moved further below the 50.0 no-change threshold, signaling a faster deterioration in manufacturing-sector operating conditions compared to the previous month.
The sharper downturn in the Austrian manufacturing sector at the start of the third quarter was primarily driven by the steepest reduction in new orders since March. This decline was attributed to slow decision-making among clients and weak demand from the construction sector, with a notable decrease in new work from abroad, especially Germany. Additionally, employment dropped at the sharpest pace since early 2020, when Covid-19-related shutdowns began. Meanwhile, production volumes contracted at a softer pace, enabling manufacturers to clear backlogs.
On the price front, input costs rose for the second consecutive month, driven by higher raw material prices and increased freight charges. That said, manufacturers faced strong competition for new work, leading to a further, albeit modest, drop in factory gate prices. At the same time, business sentiment weakened, with manufacturers’ growth expectations for the coming year retreating from June’s 28-month high to the lowest since February, largely due to concerns over sustained weakness in new orders.