2023.01.2712:14:00UTC+00Austria Manufacturing Downturn Eases In January

Austria's manufacturing contraction continued to moderate at the start of the year, as supply constraints and falling demand woes eased amid cooling inflationary pressures, according to S&P Global survey data released on Friday.

The UniCredit Bank Austria manufacturing Purchasing Managers' Index rose to 48.4 in January from 47.3 in December. However, a score below 50.0 indicates contraction.

The latest reading was the highest in four months, and indicated that the sector was moving toward stabilization at the start of the year.

Production declined at the weakest pace in six months. The overall lower output was mainly attributed to weaker demand, supply chain disruption, and high input costs. But the survey revealed that all these negative influences on production had begun to wane.

New orders continued to fall in January, as clients were hesitant to place new business due to tightening financial conditions and economic uncertainty. Nonetheless, the pace of decrease was the slowest since July.

Supply chain disruptions eased amid reports of improved material availability and reduced pressure on transport capacity.

Consequently, cost inflation softened to a 26-month low in January, while output price growth picked up slightly.

The employment growth in the sector has slowed slightly since December, but was still strong in the context of the historical trend.

For the first time in eight months, goods producers were more optimistic about the outlook for the year ahead, the survey said.