Austria: Manufacturing conditions improve at a stronger pace in December
January 4, 2021
Operating conditions in Austria’s manufacturing sector improved at a stronger pace in December, compared to the prior month and ending the year on a high note. The UniCredit Bank Austria Manufacturing Purchasing Mangers’ Index (PMI) rose to 53.5, the second-highest reading over the past two years, from 51.7 in November. Consequently, the index moved further above the neutral 50-threshold that separates expansion from contraction in manufacturing conditions compared to the prior month.
The uptick was driven by greater export sales driving stronger output—production rose for the sixth month running. Amid improved demand dynamics and output growth, employment fell only marginally at the close of the year, with the drop in payroll numbers being the weakest since March. Turning to prices, bottlenecks on the supply side led to the second consecutive acceleration in input cost inflation; price pressures rose due to higher prices for metals, chemicals and plastics. As a result, output prices rose as well albeit at a soft rate due to strong competition for new work. Lastly, producer confidence rose to the highest level since February 2018 amid positive news on the Covid-19 vaccination front.