BA-CA Purchasing Managers’ Index in June:
Setting a Brisk Pace: Austrian Industry Offers a Pleasant Surprise
After a slight dip in May the BA-CA Purchasing Managers’ Index rose again appreciably in June – from 56.7 to 58.0. Index readings above 50 indicate growth. “Evidently growth in the Austrian industrial sector has not yet peaked,” said Marianne Kager, chief economist of Bank Austria Creditanstalt (BA-CA). Rising domestic demand in particular is increasingly making itself felt. Although the pace with which export order books are being filled has slowed again, demand still remains very robust. “Despite flagging growth in foreign markets, the overall index for incoming orders has almost reached the record level seen in April," according to Stefan Bruckbauer from BA-CA. The momentum of industrial activity thus remains extremely strong as summer begins.
Indicators show that as industrial production has picked up again capacities have also been expanded. The purchasing managers who were surveyed also reported increased employment levels with this indicator rising from 51.8 to 53.7, a figure similar to that of 2000, when industry recorded an increase of almost 1% in employment by the end of the year. “Our survey indicates that Austrian industry can be expected to report a higher level of employment at year end for the first time since 2000,” said Ms. Kager.
Purchasing managers continue to report steep increases in purchasing prices, with this indicator soaring from 67.7 to an extremely high 70.1. Although sales prices continue to rise, they are doing so at a much slower pace than purchasing prices. Nevertheless, overall prices confirm the very brisk levels of industrial activity. This is also confirmed by the fresh increases in purchasing volume – the indicator rose from 57.5 to 59.0.
According to Bruckbauer “after a growth rate of approximately 5% in spring, we anticipate that the industrial sector could achieve a growth rate of almost 7% in summer.” It is therefore safe to assume an economic growth rate of 2.5% for 2006 for Austria. According to the BA-CA economists the expected shift in growth from foreign to domestic demand is now being confirmed.
Note: PMI figures above the 50.0 mark indicate growth; readings below the 50.0 mark indicate contraction in the manufacturing sector compared to the previous month. The greater the divergence from 50.0, the greater the change signalled. This report contains the original data from the monthly survey among purchasing managers of industrial companies in Austria. The survey is sponsored by Bank Austria Creditanstalt and has been carried out by NTC Research under the auspices of ÖPWZ, the Austrian Productivity and Efficiency Centre, since October 1998.
Enquiries: Bank Austria Creditanstalt Economics Department
Stefan Bruckbauer, Tel. +43 (0)5 05 05 ext. 41951