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Austria's Manufacturing Sector Deteriorates Further

Austria's manufacturing activity contracted for the second straight month in September amid a sharp downturn in new orders and rising inflation caused by higher energy prices, survey results from S&P Global showed on Wednesday.

The UniCredit Bank manufacturing Purchasing Managers' Index remained steady at 48.8 in September. Any reading below 50 indicates contraction and a score above 50 suggests expansion in the sector.

In August, the index reached the sub-50 contraction territory for the first time since June 2020.

New orders fell at the quickest pace since May 2020, due to the uncertain outlook and elevated prices, with high stock levels at customers also dampening demand.

Similarly, new export orders declined at the sharpest rate in twenty-seven months.

Purchasing activity among manufacturers decreased for the third successive month in September.

Material shortages and transportation problems continued to delay purchases. Despite a slight increase in delays since August, this was the second-lowest rate in 22 months.

Input price inflation accelerated from August's 19-month low to the highest since June, led by a surge in energy costs. Output price inflation was also the fastest in three months.

On a positive note, employment levels rose further in September, with efforts to expand capacity and fill vacancies.

Looking ahead, firms were the most pessimistic since the initial wave of COVID-19 nearly two-and-a-half years ago.

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