Austria's manufacturing activity deteriorated at an accelerated pace in September as new orders declined the most in more than two years, data produced by S&P Global showed on Wednesday.
The UniCredit Bank Austria Manufacturing Purchasing Managers' Index dropped to 39.6 in August from 40.6 in the previous month. Any score below 50 indicates contraction in the sector.
Output fell for the sixteenth successive month in September, and the rate of contraction was quicker than the average over the current sequence of decline.
Lower production was mainly attributed to a sustained downturn in demand, with new orders falling at the sharpest rate since May 2020. The latest fall in new business was linked to customer hesitancy, declining construction activity and a general economic slowdown.
Foreign demand also witnessed a sharp drop in September, especially weaker new work from Germany.
In September, backlogs of work in Austria's manufacturing industry decreased to their lowest level in nearly three and a half years.
There was a sharp decrease in factory employment as workloads fell and businesses became more pessimistic about the future. The pace of job shedding was the quickest since May 2020.
Goods producers also reduced their purchasing activity, a similar kind of decline last seen in the initial COVID wave in early 2020.
On the price front, input costs decreased further as firms reported negotiating improved terms with suppliers. Competition for new work also led to a further drop in average factory gate charges.
