Austria: Manufacturing operating conditions contract at softer pace in June
June 26, 2020
Manufacturing operating conditions contracted at a softer pace in June, with the UniCredit Bank Austria Manufacturing Purchasing Mangers’ Index (PMI) rising to a four-month high of 46.5 from 40.4 in May. However, the headline figure remained below the neutral 50-threshold and indicated an overall decrease compared to the previous month.
June’s uptick reflected the smallest fall in output since the start of the coronavirus crisis, but demand weakness due to hesitancy among clients dragged on the recovery. That said, domestic demand firmed up quicker than foreign demand, likely due to Austria exiting lockdown ahead of its regional peers. June saw further redundancies, while backlogs of work diminished. Turning to prices, input prices fell at the quickest rate in nearly eight years due to demand weakness, while output prices eased sharply due to lower input costs and discounting. Business expectations, meanwhile, remained depressed on fears of a longer-term squeeze on consumer spending.
Author: Jan Lammersen, Economist