Austria: PMI remains entrenched in contractionary territory in October
Austrian business conditions contracted again in October, albeit at a softer pace compared to September, as the UniCredit Bank Austria Manufacturing Purchasing Managers’ Index (PMI) edged up to 45.5 from 45.1. However, the index remained firmly entrenched below the 50-threshold that separates contraction from expansion in the manufacturing sector; the index has remained in contractionary territory for seventh consecutive months.
The latest downturn came on the heels of another steep drop in output and a marked fall in employment, reflective of decreased domestic and foreign demand. Output dropped for the sixth month in a row, which marks the longest contractionary sequence in eight years. Anecdotal evidence highlighted that demand suffered from a lack of investment and the ongoing downturn in the German automotive sector. Subsequently, headcounts were reduced at the strongest rate in nearly 10 years.