Slowed down upswing
Austria’s industry is feeling the problems in the supply chains. That is according to Bank Austria’s latest report on its Purchasing Managers’ Index. The bank has been publishing this index, which is produced in collaboration with the British market research institute IHS Markit, since 1998.
Currently, Austrian industry continues to recover strongly. However, the momentum is waning somewhat, as Bank Austria notes.
Purchasing managers’ index down
The Purchasing Managers’ Index fell in August for the second time in a row. However, Bank Austria describes the current index value of 61.8 points as excellent. The indicator continues to show a very high growth rate, which is still clearly above that of previous recovery phases in Austrian industry.
Bank Austria justifies the decline in the Purchasing Managers’ Index in the past two months by the weakening support from the international economy as well as renewed problems in the supply chains. At the same time, the bank reports a slowdown in production expansion in Austrian industry.
Increased costs in purchasing
According to the financial institution, the delivery delays led to another sharp increase in purchasing costs in August. Due to existing agreements, Austrian companies were unable to pass on the full extent of the sharp rise in the cost of input materials and raw materials to customers in the month. According to the bank, this resulted in a deterioration in earnings on average. However, strong demand in recent months has ensured a strengthening of pricing power, Bank Austria notes.
Problems with supplies from Asia are likely to continue for some months, the bank believes. As a result, the upturn in prices should not lose steam too quickly, the financial institution mentions in this regard.
Positive business outlook
For the coming months, Bank Austria says it expects the industrial upturn to continue at a stable pace. In addition, the financial institution reports that Austrian companies are somewhat more optimistic about the business outlook for the year.