Austria: PMI soars to record high in December
December 29, 2017
The Bank Austria manufacturing Purchasing Managers’ Index (PMI) jumped to 64.3 points in December, up from the previous month’s reading of 61.9 and the highest print in the history of the survey. The index continued to move further above the critical 50-threshold that indicates expansion in business activity in the manufacturing sector. The Austrian manufacturing sector has remained in expansionary territory for 33 consecutive months.
Strong growth in output, new orders, purchasing, employment and backlogs supported the reading, all registering the fastest rates of expansion on record. Surging domestic and foreign demand led manufacturers to record the strongest growth rate of new orders in December since the survey began nearly two decades ago. Employment also grew at a record pace but was not enough to offset increased backlogs of work, in part due to delays and shortages in the supply chain. Looking at prices, higher prices for oil and raw materials fueled inflationary pressures on input costs, which increased at the fastest pace since April 2011. Subsequently, output prices also rose at a fast pace, albeit slightly slower than in the prior month.
Austrian manufacturers were, moreover, the most optimistic regarding expected growth since July 2012, when confidence data was first collected. The high level of confidence was in part due to strong domestic and foreign demand expectations in the year ahead.
Author: Jan Lammersen, Economist