Austria: PMI drops to 55-month low in June
The Austrian manufacturing sector closed the second quarter on bad footing, with the Bank Austria’ Purchasing Managers’ Index (PMI) dropping to 47.5 in June (May: 48.3) and marking the lowest print in 55 months. June’s result rounded out a string of weaker prints throughout the second quarter, pointing to weaker economic momentum in Q2.
June’s intensifying downturn in the sector was chiefly driven by dropping new orders as the economic climate has become more challenging, with both domestic and foreign demand weakening. Demand from the automotive sector was particularly muted, while export orders fell at the quickest rate in nearly seven years. As a consequence of frail new work, firms lowered their purchasing activity, driving an improvement in suppliers’ delivery times, and offloaded stocks of finished goods. Input price inflation consequently fell for the first time in 34 months; however, output price inflation remained afloat as manufacturers looked to beef up their profit margins.
Sentiment among goods producers, meanwhile, was largely unchanged as the growth outlook related to new product launches and planned expansion into new markets offset qualms over the economic moderation.