Austria: Manufacturing PMI drops in July
July 28, 2021
Austrian manufacturing operating conditions improved at a softer pace in July, with the UniCredit Bank Austria Manufacturing Purchasing Managers Index (PMI) falling to 63.9 in July from 67.0 in June. However, the index remained firmly above the neutral 50-threshold that separates expansion from contraction in the manufacturing sector.
The moderation was largely driven by softer expansions in output and new orders, the weakest in five months, with both domestic and foreign demand cooling from the boom in recent months. Output was also hindered by materials shortages, while supply shortages in the automotive sector, for example, also weighed on production. Despite this, manufacturers faced difficulties keeping up with demand, leading to another rise in backlogs of work albeit a sharp rise in employment. However, fears over supply drove an increase in pre-production inventories. On the inflation front, higher input prices were passed on to consumers through increased factory gate charges. Both input and output price inflation rose at a record pace. Lastly, sentiment fell to the lowest this year, but manufacturers remained firmly optimistic.