2023.03.2911:02:00UTC+00Austria Manufacturing Activity Contracts Most Since May 2020

Austria's manufacturing sector deteriorated at the steepest pace in nearly three years, as both output and new orders fell at faster rates, survey data from S&P Global showed on Wednesday.

The UniCredit Bank manufacturing Purchasing Managers' Index, or PMI, fell to 44.7 in March from 47.1 in February. A score below 50 indicates contraction in the sector.

Output declined at the fastest pace in four months, and the fall in new orders was sharp and the most marked in this year so far.

The fall in demand was largely attributed to high prices, general market uncertainty and excess stock levels.

A decrease in production requirements and the unwinding of safety stocks built up during the pandemic led to substantial reductions in goods producers' purchasing activity.

On the price front, input price inflation eased somewhat in March amid a softening of energy costs, reduced logistical issues along with the rebalancing of supply and demand for materials. Meanwhile, output price inflation slowed to its lowest since January 2021.

Manufacturers' production expectations in the next twelve months weakened in March amid headwinds of high inflation, elevated energy costs, market uncertainty and rising interest rates.