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Austria PMI June 2022

Austria: Manufacturing PMI falls sharply but remains in expansionary territory in June

The UniCredit Bank Austria Manufacturing Purchasing Managers’ Index (PMI) moderated to a near two-year low of 51.2 in June from 56.6 in May. The index, however, remained above the neutral 50-threshold that separates an overall improvement in conditions from a deterioration in conditions, as compared to the prior month.

The headline moderation was driven by a sharp drop in new orders, with demand suffering from high prices and greater economic uncertainty. New export orders also dropped in the month. Given softening demand dynamics, production fell for the first time in two years. Material shortages also impacted production. Purchasing activity, however, was stepped up as a precautionary measure in the face of supply chain issues. More positively, employment continued to rise, albeit at a 16-month soft pace. Furthermore, input and output price inflation eased.

Analysts at the EIU added:

“We expect the war in Ukraine to have a significant impact on Austria. EU sanctions on Russian lenders will hit Austrian banks’ profits. With the war disrupting supply chains and pushing up energy prices, the manufacturing sector will also suffer. […] Germany, with which the Austrian economy is closely connected, is set to be one of the worst affected economies in the EU by the Ukraine conflict.”

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