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Growth remains sharp in the Austrian manufacturing sector

Staff Writer | May 31, 2017
The latest PMI survey data indicated another month of sharp growth in the Austrian manufacturing economy.
Austrian manufacturing
Austria   UniCredit Bank Austria Manufacturing PMI
The rate at which business conditions improved was close to the sixyear high seen in April’s survey.

Accelerating production growth, strong inflows of new orders (domestic and export) and sharp job creation were all major contributors towards the sector’s strong growth performance.

In terms of inflation, cost pressures eased for Austrian manufacturing firms, leading to a dip in output price inflation.

The UniCredit Bank Austria Manufacturing PMI – a composite indicator designed to provide a singlefigure snapshot of manufacturing performance – posted 58.0 in May, down from 58.1 in April.

Although dipping fractionally, the headline PMI index remained similar to its six-year high seen in the preceding survey.

Growth was seen across the three monitored goods categories, with the sharpest rate of expansion experienced in the investment goods sector.

According to anecdotal evidence, the improvement in business operating conditions was driven by increased investment and an economic upturn in the Austrian economy.

This was a key factor behind the latest growth in new orders, which rose sharply again in May.

Higher levels of new orders led to a rise in output requirements for Austrian manufacturers.

Production rose at the sharpest rate for three months in the latest survey, continuing the recent trend of steep growth, the strongest seen for six years.

New export orders also rose sharply in the latest survey, albeit at a marginally slower pace than in April.

Firms commonly noted that an upturn in the global economy had led to increased demand for Austrian-produced goods.

Of the three monitored goods categories, the investment goods sector experienced the quickest growth in exports.

Rising raw material costs meant that input price inflation remained sharp overall.

However, the rate of increase dipped for the second month in a row.

The easing in input price inflation was partly reflected in the trend in output charges, which rose at a slower rate for the first time in three months.

That said, output charge inflation remained relatively sharp overall in May.

Firms commonly noted they had passed on part of the burden of higher raw material costs.

Growth in employment was sharp in May, and was driven by increased production requirements, according to anecdotal evidence.

The latest data extended the current sequence of growth to 14 months.

The fastest rate of job creation was seen in the investment goods category.

Finally, sentiment towards the year-ahead outlook remained strongly positive in May.