BA-CA Purchasing Managers’ Index in November:
Austria’s industry posts strong growth
- BA-CA PMI surges in November
- Order intake from Austria and abroad up
- Highest job growth since the 1970s
- Robust expansion to continue up to year-end, headwind in 2008
The BA-CA Purchasing Managers’ Index (PMI) rose from 52.8 to 55.0 in November. Marianne Kager, chief economist at Bank Austria Creditanstalt (BA-CA), reported: “Austria’s industry was able to break from the pack in November and posted good growth in spite of the poor global conditions overall.” The PMI reached 55.0, coming close to its September level. “This hefty jump in our Purchasing Managers’ Index shows that Austria’s industry is rebounding nicely from the slight autumn dip and will close the year with growth of between four and five per cent,” said BA-CA economist Stefan Bruckbauer.
This recovery in the BA-CA PMI was driven above all by improved order intake from customers in Austria and abroad. After reporting declining foreign orders in October, industrial enterprises saw new orders from customers outside of Austria jump in November. The corresponding index component rose from 48.2 to 52.6. Order intake from customers in Austria surged as well, and pushed the index component for order intake from 50.1 to 53.5.
“The inflow of new orders for Austria’s industry has not been adversely impacted by the strength of the euro and the economic downturn in the USA, at least for now,” said Marianne Kager. Production is being ramped up accordingly, reported the respondent purchasing managers. This index component advanced from 52.1 to 55.7 – one of the strongest gains ever posted in the history of the BA-CA PMI. At 55.7, the production index is also well above the all-time average. In spite of the hefty increase in production growth in November, not all orders could be processed and the index component for orders on hand increased considerably from 50.3 to 53.5.
The continued good order intake and output situation in Austria’s industry led to a considerable increase in the number of jobs in November. This index component improved from 54.8 to 56.8. “Employment in Austria’s industry is growing faster than it has since the 1970s,” said Stefan Bruckbauer. A surge from 50.8 to 54.6 in the purchasing volume component also shows that the country’s industrial enterprises are very optimistic.
In spite of healthy demand and the rising oil prices, the price pressure for other raw materials has decreased somewhat; the corresponding index component fell slightly from 58.1 to 57.2. While Austria’s industry is succeeding in bucking the general order intake trend, the same cannot be said for sales prices. The index fell again from 51.6 to 51.1, the lowest level posted in two years. The sagging global economy was also reflected in the index component for delivery times, which went up from 42.2 to 44.5 – the lowest increase in delivery times posted in two years.
All in all, BA-CA’s economists expect that Austria’s industry will end the year in top form. “The rising level of orders on hand and the growing employment and purchasing volumes are all indicators that Austria’s industrial enterprises are optimistic, and we expect them to remain so at least until the end of the year,” summarised Marianne Kager.
“Even Austria’s very competitive industry will not be able to entirely resist the effects of the weaker US economy, the strong euro and the low rate of growth in the eurozone,” said Stefan Bruckbauer. BA-CA’s economists expect strong headwind for Austria’s industry in 2008, but see no danger of a recession, especially after the excellent showing in November.
Note: PMI figures above the 50.0 mark indicate growth compared to the previous month; readings below the 50.0 mark indicate contraction. 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, which 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 Group Economics and Market Analysis
Stefan Bruckbauer, tel. +43 (0)50505 ext. 41951