The economic recovery in Austria is well under way. Signs that economic activity has picked up can also be found at the regional level. None of the major regions has lagged behind; even in the Southeast, where in previous business cycles the rebound came at a late stage, demand has firmed up rapidly. The upturn has been supported by foreign demand and brisk investment activity. Construction has maintained its high level. Because the rebound in Europe is lagging considerably behind the upswing in the U.S., prices of raw materials have recovered in an earlier cyclical phase; this price increase is now benefiting the producers in the basic goods industries. Only tourism is still suffering from the weakness in consumer demand typical of the early phase of the upswing; this year the decline in tourism expenditures has been compounded by special factors. All these demand factors are manifest in the economic development of the provinces. In Upper Austria (+2.9 percent), Carinthia (+3.1 percent), Salzburg, and Vorarlberg (+3.3 percent each) gross value added (excluding agriculture and energy) advanced at an above average rate. In Carinthia, Salzburg, and Vorarlberg gains in construction offset losses in tourism; in Carinthia and Salzburg manufacturing also posted high increases. Thanks to the pick-up in the demand for steel, Styria reached the average rate of increase of 2.5 percent. Lower Austria (+4.6 percent) and Burgenland (+5.9 percent) posted the highest gains; in Burgenland the precipitous output loss in the apparel industry, which looms large in this state's manufacturing sector, was more than offset by gains in other branches of manufacturing. Tirol (+1.1 percent) was the only state in which the positive growth impulses were not strong enough to counterbalance the losses in tourism which reduced economic growth by about 1 percentage point. Vienna's economy is more strongly oriented towards consumer demand than that of other states; moreover, the phasing out of major construction projects is only being felt now. There are problem areas in Vienna's economy, however. Distribution and banking and insurance lag considerably behind the development in the other provinces and account for ½ percentage point of the growth differential. With a rate of +0.8 percent, Vienna is the laggard among the provinces in the current cyclical upswing.
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Volume (Year): 67 (1994) Issue (Month): 11 (November) Pages: 612-616 Download reference. The following formats are available: HTML
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