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Austrian manufacturing growth remains elevated

Staff Writer | July 31, 2017
The latest PMI signalled further sharp growth in the Austrian manufacturing economy in July.
Austrian manufacturing
Austria   UniCredit Bank Austria Manufacturing PMI
Steep growth in output, new orders and employment were all key contributors towards the positive result.

Additionally, vendor performance deteriorated to the greatest degree on record, in response to rising demand from Austrian manufacturing firms.

On the price front, input and output cost inflation remained sharp during July, with input price inflation easing only marginally.

The UniCredit Bank Austria Manufacturing PMI – a composite indicator designed to provide a singlefigure snapshot of manufacturing performance – posted 60.0 in July, down slightly from 60.7 in June.

The latest figure signalled the second-steepest expansion in the Austrian manufacturing economy since March 2011.

Production growth in the Austrian manufacturing sector remained steep in July, despite easing marginally since the preceding survey.

Growth was registered across all three monitored sub-sectors, and was led by the investment goods category.

Furthermore, the latest result extended the current sequence of rising output in the Austrian manufacturing sector to 28 months.

Anecdotal evidence pointed towards strong demand in both domestic and export markets.

New orders received by Austrian manufacturers grew in the latest survey, albeit to a slightly lesser extent than registered in June.

The expansion was sharp overall and well above the historical average.

In addition, new export business grew in July.

That said, the rate of growth was at a lower level than new order growth, signalling stronger demand in the domestic economy than from abroad.

Suppliers’ delivery times lengthened to the greatest extent in the survey’s 19-year history during the latest survey.

Austrian manufacturers reported a sharp deterioration in vendor performance, citing a shortage in capacity as a major factor.

Input price inflation remained steep in July.

That said, average cost burdens grew at the slowest rate in the past eight months.

Meanwhile, output prices increased sharply during the latest survey period.

Anecdotal evidence suggested that part of the burden of high raw material costs continued to be passed on to customers.

Job creation in the Austrian manufacturing sector remained strong during July.

The rate of employment growth was sharp overall and above the series long-run average.

Firms expanded their workforces in response to rising production requirements, according to anecdotal evidence.

Finally, optimism towards future output remained strongly positive in the latest survey.

More than one-third of respondents expect their level of output to increase in the next 12 months.