Austria points towards deep Euro recession

 As always, the PMI for Austria is one of the earliest released for the latest month.   Austria is so embedded in the economy of the whole of Europe that what happens there is a good guide to what's happening in Europe as a whole.  

Austria's PMI fell again in July, deeper into recession territory.

S&P Global's commentary is illuminating:

Austria's manufacturing sector endured a difficult start to the third quarter, according to the latest UniCredit Bank Austria PMI® data produced by S&P Global, registering a sharp and accelerated drop in production levels alongside a nearrecord fall in factory gate charges. The decline in backlogs of work across the sector meanwhile gathered pace as demand continued to fall, which in turn led to increased pessimism among firms towards the outlook and a pick-up in the rate of job losses. 

The seasonally adjusted UniCredit Bank Austria Manufacturing Purchasing Managers’ Index® (PMI®) – a single-figure gauge of performance calculated from measures of new orders, output, employment, supplier delivery times and stocks of purchases – edged deeper into sub-50 contraction territory in July, falling from June's 39.0 to 38.8. This was its lowest reading since April 2020. The drop in the headline index reflected faster declines in output, employment and stocks of purchases. 

The rate of decline in production in July was the quickest seen for over three years. Where output schedules were scaled back, surveyed firms generally attributed this to reduced inflows of new orders and an associated drop in backlogs of work. 

A fifteenth straight monthly decline in new orders was recorded in July, amid reports of customer destocking, tighter financial conditions, weaker demand from the construction sector and general client hesitancy. Although easing slightly from the previous month, the rate of contraction remained sharp and was still quicker than that of output. Contributing to the decline in total new business was a sustained sharp downturn in international sales. 

A lack of incoming new orders to replace completed projects saw manufacturers' backlogs of work continue to fall during July. Furthermore, the rate of depletion accelerated to the quickest since May 2020.

 

[And so on .....] 

You can see from the graph in S&P Global's report that Austria's PMI is heading back towards 2009's GFC (Global Financial Crisis) lows.   Across Europe, services are still holding the overall economy up.  But only just --- and services are starting to slide too.  Not to mention that the ECB (European Central Bank) has just raised interest rates.  Again.