A real recovery is not yet in sight, but at least there are initial signals that the downturn is slowing, Bank Austria wrote in a press release on Thursday.
The results of the current survey were very mixed. “Production was reduced more sharply than in the previous month, as new business continued to decline, but at a slower rate than in November. Employment was reduced at a faster pace. Lower purchasing volumes contributed to a continuation of the decline in prices for input materials and, as a result, inventories fell,” explained Bank Austria chief economist Stefan Bruckbauer.
Prospects for the coming year
Despite the decline, the outlook for the coming year is somewhat more favorable. In particular, the losses in new business – including from abroad – are likely to be smaller. Due to the decline in inventories, the ratio of incoming orders to inventory also improved towards the end of the year, although for the time being the sales warehouses are still filled enough to be able to fulfill the new business. Bank Austria estimates that smaller losses in production and employment are likely to occur in the coming months.
After an increase in industrial production of 6 percent in 2022, domestic material goods production suffered a decline in production of almost 1 percent this year, dampened by particularly unfavorable developments in metal processing, the chemical industry and the plastics industry, the economists concluded. Next year, a slight increase in production of around 1 percent is within reach.
