Austria: Manufacturing conditions improve at a stronger pace in January
Business conditions in the manufacturing sector improved at a stronger clip in January, with the UniCredit Bank Austria Manufacturing Purchasing Managers’ Index (PMI) rising to 54.2 from 53.5 in December. January’s print marked the best result since November 2018 as the index moved further north of the neutral 50-threshold that separates expansion from contraction in the manufacturing sector compared to the prior month.
The uptick was driven by further gains in output, new orders, employment, and stocks of purchases. New business was boosted by firming demand from Asia and the U.S., as well as from intermediate and investment goods categories. However, demand from consumer goods declined—likely due to restrictive lockdown measures. Production, meanwhile, could not keep up pace with demand as firms used stocks of finished goods to meet orders, while looking to increase payroll numbers: Employment rose for the first time in nearly a year. Turning to prices, greater demand for inputs and increased supply-chain bottlenecks spiked input prices. This was partly passed on to customers. Lastly, manufacturers’ optimism regarding output over the next 12 months rose to the highest level in two years.