Austria’s manufacturing activity deteriorated at a slower pace in October amid softer falls in output, new orders, and employment, data produced by S&P Global showed on Friday.
The UniCredit Bank Austria Manufacturing Purchasing Managers’ Index rose to a 6-month high of 41.7 in October from 39.6 in the previous month. However, any score below 50 indicates contraction in the sector.
Further, the latest decline in production was the slowest since April. Nonetheless, the rate of contraction was still solid by historical standards.
New orders continued to decline in October, linked to customer hesitancy and a downturn in construction activity. Demand from abroad was reduced markedly, especially from Germany.
However, the rates of decline in total new orders and export sales both eased to the weakest for six months.
Firms also lowered workforce numbers in October in line with falling backlogs of work. The rate of job shedding eased from September but was still solid overall.
The survey also revealed that the ongoing sharp downturn in purchasing activity also moderated slightly at the start of the fourth quarter.
On the price front, input costs declined further, thanks to competition among suppliers and generally lower raw material prices.
Selling prices decreased at a slightly quicker rate in October, which was the second-highest since 2009 after that recorded in July.
Looking ahead, Austrian manufacturers remained pessimistic about the outlook for output over the coming year, citing concerns about the impact of high interest rates, squeezed purchasing power, and uncertainty on the economy, particularly the construction sector.