Following a downturn in the preceding month, the industrial sector saw a marginal upturn in October. The UniCredit Bank Austria Purchasing Managers' Index hit its highest score in the past six months at 41.7 points. Domestic enterprises, responding to a more gradual decline in new business, increased their output slightly compared to the month before.
Even though the slowdown in costs a minor dip in output prices was observed in October, the overall earnings situation improved. The mitigation of the decline in purchasing activities indicates the onset of a reversal in the inventory cycle.
According to the “Österreich Aktuell”, the unemployment rate was on average at 6.4 percent in the first six month of 2023 and will persist at this level in 2024.
Current indicators hint at the continuation of the weak economic trend at least until the end of 2023, although no significant downturn is anticipated. Due to an expected decrease in inflation, stronger private consumption and therefore an improvement in the overall conditions, the economic growth is forecast to grow to 0.9 percent in 2024, with real GDP forecast at 0.1 percent in 2023.
All in all, inflation is expected to average 7.8 percent in 2023 as a whole, but should drop below 5 percent by the end of the year. Due to high wage dynamics, a slower decline of the inflation rate is expected, falling to 3.6 percent in 2024.
