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29.09.2010

Bank Austria Purchasing Managers' index in September:
Austria's industry still full of energy

  • Bank Austria Purchasing Managers' Index slightly rises again in September
  • Improved orders situation keeps production growth high
  • Strongest increase in jobs in almost three years
  • Cost situation deteriorates over one year ago
  • Strong industrial dynamics allow for economic growth of 1.9 per cent in 2010

The Austrian industry is starting autumn which much force. "New business picked up again considerably in September, order backlogs have grown rapidly", Helmut Bernkopf, Bank Austria Board Member responsible for Corporate & Investment Banking, describes the most important event of the latest Bank Austria Purchasing Managers' Index for Austria's industry. "Staff capacities have been increased significantly in order to cope with the constant increase in production. The recovery of the domestic industry continues to be fast and still pushes the upward trend of the entire economy in the current year", adds Bank Austria Chief Economist Stefan Bruckbauer. 
Following the considerable decline in the previous month, the overall indicator of the latest survey shows a slight upward trend. "With a value of 56.1, the Bank Austria Purchasing Managers' Index does not reach the record values of early summer in September but still is considerably higher than the average of many years. Moreover, the indicator has been above the growth threshold of 50 points for ten months now, thus indicating not only the strong dynamic development but also the considerable robustness of the upturn in the sector", Mr  Bruckbauer says.

The economic upturn of Austria's industry mainly comes from abroad. "Significantly increasing demand from Western Europe has made new business rise considerably in September. Due to the great dynamic development with regard to orders, Austrian entrepreneurs have raised their production performance considerably again", Mr Bruckbauer says. The new business volume has been increasing constantly for fifteen months now, leading to an expansion of the Austrian industrial production.

Given the utilisation in the sector, which has meanwhile increased to almost reach the level before the crisis, domestic industrial companies hired new staff again in September. "The constant increase in incoming orders and the strong growth of order backlogs have created new jobs in Austria for six months now. The creation of new jobs was stronger in September than ever before in the past three years", says Bank Austria Economist Walter Pudschedl. Last year, however, a total of almost 37,000 jobs were cut. According to seasonally adjusted data, the number of people working in Austria's industry is more than 8,000 higher at the end of the summer than at the turn of the year 2009/2010. Moreover, the extraordinarily high dynamic development in the field of employment indicates that the industry is increasingly hiring subcontracted workers in order to be able to react to rising production needs in a flexible way.  

In order to be able to adjust to the improved order situation, Austrian industrial enterprises have strongly increased their purchasing volumes. "Delivery problems as a result of strong demand for raw material as well as capacity bottlenecks at suppliers made purchasing prices rise above average in September, although the increase was slightly smaller than in the previous month. Due to strong competition, however, the considerable increase in purchasing cost could not be passed on to selling prices completely", Mr Pudschedl says. The cost environment of the domestic industry deteriorated again in September – a constant development for one year now.

At the moment, the Austrian industry is particulalry benefiting from the strong dynamic development of foreign demand. "Austrian industrial sectors, which are in a good position and competitive on international level, have maintained their excellent position in international markets after the crisis. In the wake of the German industrial counterparts, recovery meanwhile is stronger and longer than expected given the global framework conditions", Mr Bruckbauer says. The relation between the new order index and the index for stocks of purchases, which has been a very expressive indicator for  assessing the industry's economic situation in the past, indicates that the dynamic phase seems to be behind us already but an abrupt end of the upturn in the sector is not in sight. The austrian industry will continue its course of expansion in the next few months as well. "We meanwhile expect real industrial growth of 6 per cent at least in 2010. The sector thus pushes the development of the overall economy considerably. For the full year of 2010, we expect economic growth of 1.9 per cent in Austria thanks to the export-oriented industry", Mr Bruckbauer emphasizes.

Remark: PMI values beyond 50.0 refer to growth over the previous months; values below 50.0 indicate a decline. The more values deviate from 50.0, the bigger is the trend of growth or decline. This release includes the original data from the monthly survey among purchasing managers of Austria's industry, having been sponsored by Bank Austria and carried out by Markit Economics under the patronage of the ÖPWZ since October 1998.

 charts (PDF; 85 KB)

For further inquiries: Bank Austria Economics & Market Analysis Austria
   Walter Pudschedl, Tel. 05 05 05 / 41957;
   E-Mail: walter.pudschedl@unicreditgroup.at

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