Mixed picture for manufacturing in Austria
Although new orders and output both expanded more quickly than in July – partly reflecting a renewed increase in new export business – the rate of employment growth in the sector slowed to the weakest in a year-and-ahalf.
This was the main factor driving the headline PMI to its lowest level since December 2016, albeit one that remained strong overall.
The headline UniCredit Bank Austria Manufacturing PMI is a composite single-figure indicator of manufacturing performance.
It is derived from indicators for new orders, output, employment, suppliers’ delivery times and stocks of purchases.
Any figure greater than 50.0 indicates overall improvement of the sector.
The PMI fell for the sixth time in 2018 so far to 56.4 in August, from 56.8 in July.
The latest figure was the lowest in 20 months but still well above the long-run average of 52.3, signalling a strong overall improvement in business conditions.
The decline in the headline figure mainly reflected weaker employment growth and a less severe lengthening in supplier delivery times.
By sub-sector, investment goods continued to show the strongest overall improvement in business conditions in August, followed by intermediate and consumer goods respectively.
Investment goods has been the top-performing sub-sector for 18 months.
Output growth picked up to a four-month high in August, but remained softer than the pace shown at the start of 2018 and throughout 2017.
Meanwhile, the rate of growth in new business accelerated to the fastest in five months, partly reflecting a renewed expansion in new export orders.
Subsequently, backlogs of work and input purchasing also increased at the strongest rates in five months.
Austria’s manufacturing workforce continued to expand in August.
Though strong in the context of the survey history, the rate of job creation slowed to the weakest since February 2017.
Manufacturing supply chains remained under pressure in August.
The incidence of delays was the lowest since May 2017, but remained substantial overall.
Producers of investment goods continued to face the greatest delays from vendors.
Input price inflation at Austrian goods producers remained strong in August, despite easing to a three-month low.
Firms generally linked higher prices to raw material shortages.
Manufacturers continued to hold a positive outlook for output growth over the next 12 months.
That said, the overall degree of sentiment in August was the second-weakest in over two-and-a-half years.
This partly explained a slower rise in output prices during the month, the weakest since March 2017. ■