Austria: PMI falls further into contraction territory in January
January 29, 2015
The manufacturing Purchasing Managers’ Index (PMI) elaborated by Bank Austria decreased from 49.2 in December to 48.5 in January. The index has been below the 50 threshold that indicates a contraction in business activity in the manufacturing sector since September 2014.
According to Bank Austria, a marked decline in manufacturing output that was driven by a fall in new orders was the main driver behind January’s deterioration. The Bank pointed out that, “new orders continued to decrease in January, thereby extending the current period of continuous contraction to eight months. The pace of decline accelerated since December and was sharp overall.” As a result of the fall in production, firms reduced their workforce, which led to a fall in employment for the fifth consecutive month. Finally, the lack of new orders contributed to a further reduction in backlogs.
Author: Cecilia Simkievich, Economist