UniCredit Bank Austria Purchasing Managers’ Index in September
Austria’s Manufacturing Sector Starts the Fall with Momentum
- On a growth trajectory: The UniCredit Bank Austria Purchasing Managers’ Index rose to 54.9 points in September
- Strong domestic and foreign demand drives further production growth
- Employment rose slightly in September for the second consecutive month
- Supply chain issues and higher energy prices are increasing cost pressures
- Domestic companies continue to build up their inventories to hedge against supply risks
- Optimism persists: At 59.4 points, the expectations Index was well above the long-term average, pointing to a continuation of the industrial upswing
The recovery in Austrian industry gained momentum at the start of fall. “The UniCredit Bank Austria Purchasing Managers’ Index rose to 54.9 points in September, reaching a new high since the start of the Russian invasion of Ukraine in the spring of 2022,” says UniCredit Bank Austria Chief Economist Stefan Bruckbauer, adding: “This positive trend was driven primarily by a strong increase in new orders both domestically and abroad, which led to a further expansion of production and the second consecutive rise in employment. At the same time, order backlogs increased significantly, pointing to high utilization of production capacity and a continuation of the growth trajectory in the coming months. However, the upturn is overshadowed by supply chain issues and renewed cost pressures stemming from events in the Middle East.”
New business from domestic and foreign markets is on the rise
Austrian industry benefited in September from strong demand both domestically and abroad. The index for new orders rose to 55.3 points, reaching its highest level in five years. New export orders also performed well, at 53.6 points, signaling a sustained recovery in international business. The broad improvement in the order situation led to a significant increase in order backlogs, with the corresponding index climbing to 55.2 points—indicating higher utilization of production capacity. Buoyed by strong order intake, domestic industrial firms expanded production for the fifth consecutive month. The production index reached 55.3 points in September.
“Austrian industry is entering the final quarter of the year with a significantly improved order situation. However, part of the strong demand is likely due to precautionary orders. In light of extended delivery times and geopolitical uncertainties, many companies are increasing their orders and inventory levels to safeguard their production against potential supply bottlenecks. The robust order trend therefore reflects both the economic recovery and an increased build-up of safety stocks,” explains Walter Pudschedl, an economist at UniCredit Bank Austria.
At 40.2 points, the suppliers´ delivery times index remained well below the neutral mark. This points to ongoing disruptions in supply chains, which are attributable to both geopolitical uncertainties and capacity constraints resulting from increased demand.
Employment rises again
As the industrial recovery continued, the labor market also kept improving. At 51.1 points in September, the employment index once again exceeded the 50-point growth threshold, signaling the second consecutive increase in employment. Rising new orders, higher production volumes, and growing order backlogs have increased capacity utilization at industrial firms and bolstered the demand for additional workers.
“The renewed rise in employment is a sign that companies increasingly view the current economic recovery as sustainable. The combination of rising demand, better-filled order books, and higher production output points to further stabilization of the labor market in the industrial sector. However, given the continued high cost and competitive pressures, hiring is likely to remain moderate for the time being,” said Pudschedl.
Economists at UniCredit Bank Austria expect an average unemployment rate of 4.4 percent in manufacturing for 2026, following rates of 4.3 percent in each of the two previous years.
Building Safety Stock to Hedge Against Supply Chain Risks
Manufacturing firms continued to increase their purchasing activity in September. The index for the quantity of purchases rose to 53.8 points, reaching its highest level since the summer of 2022. At the same time, stocks of purchases were significantly increased, and the corresponding index rose to 53.4 points. Stocks of finished goods also rose slightly to 50.4 points for the first time in four months.
“The combination of rising purchasing activity and increasing inventory levels shows that companies are preparing for both sustained high demand and potential disruptions in supply chains. Building up safety stock not only safeguards production but also protects companies from potential price increases and supply bottlenecks,” explains Pudschedl.
Higher Energy Prices Exacerbate Margin Pressure
Price inflation in Austrian industry accelerated again in September. The input price index rose from 68.8 to 72.1 points, reaching its highest level since the spring. Higher energy and fuel prices, in particular, drove up costs. In addition, supply bottlenecks, increased demand, and precautionary inventory buildup contributed to rising prices.
While companies were able to pass on some of the higher costs to their customers—with the output price index at 57.9 points, it remained clearly in the range of rising prices—the increase in output prices was significantly lower than that of input prices.
“Thanks to the improved order situation, industrial companies do have greater leeway in pricing. Nevertheless, the costs of raw materials, intermediate goods, and energy are currently rising significantly faster than the achievable sales prices. The price gap has recently widened again and is weighing on the profit margins of many companies,” said Pudschedl.
Industry Remains Confident
Austrian industry is entering the final quarter of the year in a strong position. The order situation is improving, production is growing, employment is rising, and companies are becoming increasingly confident. At the same time, high costs, geopolitical risks, and supply chain issues remain major sources of uncertainty. Nevertheless, companies’ production outlook for the coming twelve months was very positive. The production expectations index stood at 59.4 points in September, well above its long-term average.
“Despite the existing risks, business optimism remains high. The industrial economy in Europe, and particularly in Germany, is showing increasingly positive signs and is supporting demand for Austrian industrial goods. The conditions for a continuation of the industrial upswing are fundamentally in place. We continue to expect real industrial production in Austria to rise by 1.5 percent on an annual average in 2026,” Bruckbauer concluded.
Enquiries:
UniCredit Bank Austria Economics & Market Analysis Austria
Walter Pudschedl, Phone: +43 (0) 50505-41957;
Email: walter.pudschedl@unicreditgroup.at