Austrian Manufacturing Sector Contraction Eases

The UniCredit Bank Austria Manufacturing PMI rose to 51.7 in May 2026 from 51.2 in the previous month, pointing to a modest improvement across the manufacturing sector. Output saw renewed growth for the third time in the past four months, supported by inventory-building activity and efforts to clear outstanding backlogs of work. Moreover, new orders declined at a softer pace, with some manufacturers reporting advance purchases by clients seeking to avoid expected price increases. On the price front, input costs accelerated at the fastest pace in four years, driven by rising costs for energy, fuel, transportation, oil-related products, and other commodities amid persistent geopolitical tensions in the Middle East. Finally, expectations for output over the next twelve months edged up from April’s seven-month low, although overall confidence remained marginally below the historical average.

The UniCredit Bank Austria Manufacturing PMI fell to 51.2 in April 2026 from 52.4 in March, signaling a loss of momentum as conditions in the sector softened. The slowdown was driven by renewed declines in both output and new orders. Production also slipped back into contraction territory, while export orders showed a marginal decline. At the same time, cost pressures intensified further, with input price inflation rising to its highest level since September 2022, while output prices increased at one of the strongest rates in recent years. Supply chains also came under strain, as delivery times lengthened due to logistics disruptions linked to the Middle East conflict. Firms built up inventories for the first time in over three years, while purchasing growth slowed and employment declined more sharply due to excess capacity and cost-cutting pressures. Looking ahead, business confidence weakened to a more than one-year low amid concerns over demand, costs, and uncertainty.

The UniCredit Bank Austria Manufacturing PMI climbed to 52.4 in March 2026 from 49.4 in February, its highest since May 2022, signaling a return to expansion. The improvement was driven by stronger output and new orders, with demand rising for a second straight month at the fastest pace in nearly four years. Firms noted that some customers brought forward purchases and built buffer stocks amid supply disruption risks linked to the Middle East conflict. On the other hand, inflationary pressures intensified, with input costs posting a record increase and reaching their highest level since October 2022 amid surging energy, fuel, and transport prices. Firms raised output charges at the fastest pace in over three years. Employment continued to decline, though at a slower pace. Looking ahead, business confidence weakened to a six-month low amid concerns over future demand and rising prices, though sentiment remained positive overall.