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Austria PMI April 2020

Austria: PMI falls to record-low in April

Business conditions in the Austrian manufacturing sector worsened significantly in April, with the UniCredit Bank Austria Manufacturing Purchasing Managers’ Index (PMI) falling to a historic low of 31.6 from 45.8 in March. The headline figure comes in below the previous all-time low recorded during the financial crisis—indicating that the recession resulting from the Covid-19 pandemic will be greater—and the neutral 50-threshold that separates a contraction from an expansion.

The freefall in the index came on the back of the global lockdown in order to contain the spread of the virus, leading to record falls in output and new orders while employment also fell in spite of the government’s short-time work scheme. Output collapsed to the lowest level on record owing to dissipating demand, while orders were postponed or canceled as parts of the economy shut down. However, lengthening of suppliers’ delivery times and rising stocks of purchases softened the fall in the headline figure. Looking at prices, weakened demand drove a further decline in input costs while goods-producers offered discounts to secure sales.

While the government is slowly beginning to reopen the economy, the global nature of the pandemic will continue to have a negative bearing on the sector and the wider economy: Output expectations dropped to the lowest level in the survey’s history as many firms foresee long-lasting effects from the health crisis.

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