Austria: PMI edges down in August
August 29, 2018
The headline Purchasing Managers’ Index (PMI)—which is compiled by Bank Austria and released by IHS Markit—resumed its general downward trend since the start of the year in August, dropping to 56.4 from 56.8 in July and registering the lowest reading since December 2016. However, the reading remained easily above the crucial 50-point threshold that separates expansion from contraction in the Austrian manufacturing sector. It also remained above the long-term average of 52.3 and marked the 41st consecutive month in which business conditions in the sector improved.
The slight moderation came on the back of weaker job growth, which more than offset faster increases in new orders and output. Job creation in August was the weakest in a year-and-a-half while the acceleration in new orders and output growth was partly due to renewed export momentum. As a result of the strong increase in new orders and soft growth in employment, backlogs of work continued to grow.
In terms of prices, raw material shortages drove input price inflation. However, output price inflation slowed in August due to moderating business sentiment.
Author: Jan Lammersen, Economist