FX.co ★ Austria Manufacturing Sector Logs Sharp Contraction

Austria's manufacturing sector experienced an intensifying downturn in July, mainly driven by a significant reduction in new orders, according to survey data released by S&P Global on Monday.

The UniCredit Bank Austria Manufacturing Purchasing Managers' Index dropped to 43.1 in July, down from 43.6 in June. An index score below 50.0 indicates contraction. The latest figure marks the lowest point since March and falls below the average observed during the current two-year period of declining activity.

New orders saw the sharpest decline since March, attributed to sluggish decision-making among clients and weak demand from the construction sector. Export orders also registered a notable drop.

Production volumes were reduced in July, although the rate of decline eased slightly. Manufacturers worked through backlogs at an accelerated pace.

Additionally, employment numbers in the sector fell at the steepest rate since the initial COVID-19-related shutdowns.

Purchasing activity decreased more rapidly in July, and pre-production inventories saw their largest reduction in three months. Concurrently, lead times shortened at the slowest rate since February.

On the pricing front, the survey indicated that average input costs rose for the second consecutive month. This increase was in contrast to a further fall in prices charged by manufacturers, who cited intense competition.

Manufacturers' outlook for growth over the coming year turned less optimistic in July. Expectations declined from June's 28-month high to the lowest level since February.