Austria: PMI falls sharply in March
Business conditions in the Austrian manufacturing sector deteriorated markedly in March, with the UniCredit Bank Austria Manufacturing Purchasing Managers’ Index (PMI) falling to 45.8 from 50.2 in February.
The steep deterioration in operating conditions came on the back of the sharpest fall in output since the global financial crisis, with the Covid-19 pandemic wreaking havoc on supply chains and global economic activity, partly due to containment measures across the globe. However, the headline reading was flattered by an increase in suppliers’ delivery times and stockpiling of goods. While these subcomponents artificially boosted the PMI, in the current climate they are not indicative of positive developments, but rather a reflection of supply chain disruption. Moreover, the impact of the pandemic on business activity led to job losses and shorter working hours. In terms of prices, weak demand and low global oil prices drove input costs down, and output prices also fell, likely in an effort to retain customers. Meanwhile, business confidence dropped to a record-low.