Austria: Operating conditions contract at softer pace in May
May 27, 2020
Operating conditions in the Austrian manufacturing sector contracted at a softer pace in May compared to April as lockdown measures are gradually lifted, enabling greater economic activity. The UniCredit Bank Austria Manufacturing Purchasing Managers’ Index (PMI) rose to 40.4 in May from the all-time low of 31.6 in April. The headline figure, however, remained markedly below the neutral 50-threshold that signals an overall decrease compared to the previous month; moreover, the print marked the second-lowest result since the global financial crisis.
The uptick in May reflected softer drops in output, new orders and employment as Covid-19 restrictions were gradually eased. In particular, closures of clients and hesitancy among customers affected order books. Consequently, jobs continued to be cut amid weakened demand dynamics. In fact, the rate at which jobs were shed was the second-fastest in over a decade, despite easing from the prior month. Meanwhile, stocks of finished grew at an accelerated pace, which will weigh on output once demand picks up. Looking at prices, both input and output prices fell at quick paces, with output charges falling at the fastest extent in 11 years.
Author: Jan Lammersen, Economist