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Austrian manufacturing growth slowest for year-and-a-half

Staff Writer | June 28, 2018
The latest PMI data from Unicredit Bank Austria signalled a further loss of growth momentum in the Austrian manufacturing sector in June, with business conditions improving at the slowest pace since December 2016.
Austrian manufacturing
Europe   New business growth was unchanged
This mainly reflected slower job creation in Austria, while new business growth was unchanged from May’s recent low.

Output growth strengthened slightly, while supply chains remained under intense pressure.

The June survey data for Austria also revealed greater upward pressure on input prices paid by manufacturers.

The headline UniCredit Bank Austria Manufacturing PMI is a composite single-figure indicator of manufacturing performance.

It is derived from indicators for new orders, output, employment, suppliers’ delivery times and stocks of purchases.

Any figure greater than 50.0 indicates overall improvement of the sector.

The PMI in Austria fell for the fifth time in six months to 56.6 in June, down from 57.3 in May.

The latest figure was the lowest since December 2016 but still well above the long-run average of 52.2, signalling a strong overall improvement in business conditions.

At 39 months, the current sequence of positive PMI readings is the longest in the survey’s near-twenty year history.

Austria’s manufacturing job market showed signs of cooling in June.

The size of the workforce increased for the twenty-seventh successive month, but the rate of growth was the slowest since May 2017.

New orders in Austria expanded for a thirtieth consecutive month in June, the longest sustained period of growth in over a decade.

The rate of expansion remained stable at the relatively modest pace achieved in May, however, the joint-weakest since August 2016.

Output growth picked up slightly in June, but remained softer than the recent trend.

Growth of consumer goods output remained comparatively weak compared with the trends for intermediate and investment goods.

Backlogs of work rose for a twenty-second consecutive month in June.

Reflecting the recent slowdown in new order growth, the rate at which backlogs increased was the weakest since October 2016.

Suppliers’ delivery times continued to lengthen substantially in June as firms reported raw material shortages.

That said, the incidence of delays was the lowest since September 2017.

Manufacturing input prices in Austria rose sharply in June, and at the fastest rate in five months.

Firms reported higher prices for metals, plastics, wood and packaging.

This led to another strong increase in output prices.

Austrian manufacturers maintained a positive outlook for output growth over the next 12 months in June.

That said, the degree of sentiment remained weaker than at the start of 2018.