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Austrian manufacturing growth remains strong in March

Staff Writer | March 31, 2017
The Austrian manufacturing sector ended the first quarter of 2017 strongly, with ongoing sharp increases in new work, production and employment.
Austria   Bank Austria Manufacturing PMI
That said, rates of growth for order books and output softened since February.

On the other hand, job creation accelerated to the highest since May 2011. Concurrently, inflationary pressures intensified.

The Bank Austria Manufacturing PMI posted 56.8 in March, down from 57.2 in February.

Nevertheless, the first quarter saw the highest average growth rate since the start of 2011.

Output in the Austrian manufacturing industry rose for the twenty-fourth month running in March.

The intermediate and investment goods sectors both registered marked growth, whilst consumer goods saw a relatively mild rise.

That said, all three monitored sub-sectors experienced softer growth in March.

Survey data and anecdotal evidence signalled ongoing strong demand as new orders saw a sharp, albeit slower, expansion in March.

Following the trends seen for output and new orders, export growth also eased in the latest month.

In response to robust future confidence and steep output growth, firms took on more staff.

Employment growth accelerated in March to the highest since May 2011.

Some firms linked this to improving business conditions and a rise in backlogs of work.

Higher raw material costs led Austrian manufacturers to increase their output prices for the fifth month in a row.

Commodity prices were often mentioned by companies as the main cause of increased input prices.

The increase in cost burdens was widespread across the survey panel, with over 45% of respondents reporting higher costs.

It was also broad-based across all three subsectors, with investment goods experiencing the highest inflation rate.

As has been the case since December 2014, postproduction inventories declined during March.

However, the rate of depletion eased to the slowest in this sequence and was slight overall.

There was a sharp increase in purchasing activity in March, despite the rate of growth easing from February’s 71-month high.

Firms reported that demand led to an expansion in buying activity and subsequently, inventories.

This led to pressure on suppliers, with vendor performance deteriorating to the greatest extent since May 2011.