Austria: Manufacturing PMI jumps to new record-high in May
May 27, 2021
Manufacturing operating conditions in Austria improved at the strongest pace on record in May, with the UniCredit Bank Austria manufacturing Purchasing Managers’ Index (PMI) coming in at 66.4 from 64.7 in April—the previous record-high. Consequently, the index moved further above the neutral 50-threshold that separates expansion from contraction in the manufacturing sector compared to the prior month as the sector gained traction.
The rise in the headline reading reflected the strongest growth in output and new orders on record, and the fastest job creation growth in three years. New business inflows particularly benefited from strengthening foreign demand for Austrian goods. Improved demand dynamics also reflected a pick up in investment expenditure as restrictive measures began to be eased. Consequently, output gained steam. However, production could not keep up pace with the rise in demand, and backlogs of work increased at the quickest pace in the survey’s history as a result. Supply-side constraints intensified in the month, with firms using inventory to meet demand: Post-production inventories dropped at the strongest pace in over 11 years. Turning to prices, materials shortages amid widespread supply bottlenecks drove inflationary pressures up. This was partly passed on to consumers, with firms increasing their selling prices. Lastly, optimism eased to the lowest level since January due to concerns over supply.