Austria: PMI edges up in July
After repeatedly dropping during the first half of the year, the headline Purchasing Managers’ Index (PMI) rose slightly at the outset of the second half. In July, the PMI—which is compiled by Bank Austria and released by IHS Markit—edged up to 56.8 from 56.6 in June, moving further above the critical 50-point threshold that separates expansion from contraction in the Austrian manufacturing sector. It also remained well above the long-term average of 52.2 points and marked 40 consecutive months of improving business conditions in the manufacturing sector.
The slight improvement in business conditions came chiefly on the back of stronger job and output growth in July, although output growth remained soft. In contrast, new orders growth moderated, in part due to a decline in new export orders. Backlogs of work increased despite historically strong job growth; however, the pace of growth of backlogs of work slowed, reflecting slower new orders growth. Moreover, backlogs of work decreased in the consumer goods sector.
Inflationary pressures remained elevated in July owing to higher prices for input materials such as steel, chemicals, and plastics. Subsequently, output prices also increased at a strong rate. Sentiment regarding output growth in the next 12 months, meanwhile, hit its lowest level since December 2015, but remained positive.