Austrian manufacturing new orders rise at slowest rate since August 2016Staff Writer | July 30, 2018
Manufacturing business conditions in Austria continued to improve at a strong overall rate in July, according to the latest PMI data from Unicredit Bank Austria.
Europe Goods production increased at a sharp pace
Less positively, incoming new orders increased at the slowest rate since August 2016, partly reflecting a slight decline in new export business.
This contributed to a less positive outlook for manufacturing output, the weakest in over two-and-ahalf years.
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 rose fractionally to 56.8 in July, from 56.6 in June.
The latest figure was the second-lowest since March 2017 but still well above the long-run average of 52.2, signalling a strong overall improvement in business conditions.
The uptick in the headline figure mainly reflected stronger employment growth.
Output growth picked up to a three-month high in July, but remained softer than the pace shown at the start of 2018 and throughout 2017.
This partly reflected the recent subdued trend in growth of new work.
The rate of growth in new business slowed further in July to a 23-month low, and was broadly in line with the long-run survey average.
Notably, new export orders fell for the first time since August 2016, albeit only slightly.
Austria’s manufacturing job market remained strong in July.
The size of the workforce increased for the twenty-eighth successive month and the rate of growth accelerated from June's recent low, remaining historically strong.
Backlogs of work rose for a twenty-third consecutive month in July.
Reflecting the recent slowdown in new order growth, the rate at which backlogs increased was the weakest since October 2016.
Moreover, backlogs fell in the consumer goods sub-sector.
Manufacturing supply chains remained under substantial pressure in July.
The incidence of delays was the lowest since September 2017, but remained severe overall.
Producers of investment goods continued to face the greatest delays from vendors.
Input price inflation remained strong in July.
Firms reported higher prices for steel, chemicals and plastics in particular.
This resulted in another strong increase in prices charged for finished manufactured goods.
Manufacturers continued to hold a positive outlook for output growth over the next 12 months.
That said, the degree of sentiment in July was the weakest since December 2015. ■