Austria’s industry cut jobs in May for the first time since December 2020. The employment index for the manufacturing industry of UniCredit Bank Austria fell to 48.8 points and was thus below the growth threshold of 50 points. “Domestic industry is now in a recession, which currently seems to be getting worse”says Bank Austria chief economist Stefan Bruckbauer.
The bank’s purchasing managers’ index fell to 39.7 points in May, from April 2020. The downswing of the last few months is continuing unabated and is also becoming apparent in employment for the first time. With more than 20,000 people seasonally adjusted, the number of job seekers in industry has increased slightly. Nevertheless, the labor shortage remains an issue: there are an average of 1.7 job seekers for every vacancy. However, the economic weakness is likely to weaken the need for labor in the coming months.
The domestic industrial companies are confronted with a noticeably lower demand. Due to the decline in new business, the industry has reduced its capacities and production output has been reduced even more than in April. In addition to the economic downturn, high prices and high customer inventories had a negative effect. However, the lower order intake also leads to shorter delivery times.
The lower demand also leads to lower purchase prices for companies. “The costs of the companies for preliminary products fell as sharply as they were last during the financial crisis in 2009″says Bank Austria economist Walter Pudschedl.