The manufacturing sector in Austria continued its downward trend in January, with ongoing reductions in output, employment and purchasing activity, as indicated by S&P Global's report on Monday.
The UniCredit Bank Austria Manufacturing Purchasing Managers' Index, increased slightly to 43.0 in January, a rise from December's 42.0. However, even though this represented the highest score in ten months, it still fell below the required 50.0 threshold, which differentiates growth from contraction.
Throughout 2023, supplier delivery times sped up due to weak demand. But the redirection of cargo from Asia around the Cape of Good Hope caused a slowdown in the improvement of these delivery times.
January saw a less rapid drop in new orders. Nevertheless, the overall reduction in new orders remained substantially high, with respondents reporting several impediments to demand.
Again in January, production levels were diminished. The contraction rate exhibited a slight decrease since December. As a result of lower production, companies reduced their purchasing activity and stocks of finished goods also fell more sharply.
The survey also revealed that the job-cutting pace slowed down to its lowest since last August, but it still remained significant.
Moreover, purchasing costs further went down. The average factory gate charges also declined, even though it was moderate and at the same rate as the previous month.
Manufacturers' expectations for output in the following year improved, with confidence reaching its peak since January 2023.
