Although Austria’s manufacturing activity further weakened this month, the pace of the decline diminished amid the slowest drop in output for almost two years.

This is according to data published by S&P Global on Tuesday.

Indeed, the UniCredit Bank Austria Manufacturing Purchasing Managers' Index edged up to 46.3 in May from a reading of 43.5 the month before. 

A score under the 50 level signals contraction within the sector.

The easing of the downturn resulted from considerable decelerations in the decline rates of both output and new orders.

In May, manufacturing output experienced only a marginal decline, signalling the weakest contraction since July 2022. Similarly, new orders also decreased at the slowest rate seen in two years.

Also, this month, the workforce was further reduced due to the lack of capacity pressure. However, the rate of job shedding was the weakest since August of last year.

In addition, supplier delivery times continued to shorten, aligned with muted demand for imports, according to the findings from the survey.

Furthermore, in regard to prices, cost pressures were alleviated in May, with purchasing costs decreasing at a modest rate, the weakest seen since March of the previous year. Consequently, goods producers lowered their selling prices due to competition for new contracts.

Looking to the future, there's a slight uptick in growth expectations for the coming year, driven by the anticipation that reduced interest rates will bolster increased investment and overall economic activity.