Stable Growth in Austrian Manufacturing in 2000, Investment Plans Not Overly Optimistic
Growth prospects for the Austrian economy are expected to improve significantly in 2000. The European economy has gained momentum, the American economy still follows a stable growth path, and Asia and Latin-America are on the road to recovery. WIFO predicts that the Austrian GDP will achieve a real growth rate of 2.8 percent. In the recent business surveys among manufacturing firms most responses were optimistic. All seasonally adjusted indictors have followed an upward trend over the past months. The indicators of production and business climate expectations for the next months point at a continuation of this trend for the rest of the year. According to the most recent WIFO forecast of December 1999, manufacturing output is likely to grow at a rate of 4.3 percent in 2000. Overall conditions for investment are still excellent in Austria. Austrian manufacturing are expanding. Additionally, they have been able to improve their competitiveness in recent years thanks to above-average productivity growth and moderate wage increases. According to the latest WIFO forecast, labour unit costs are expected to decrease further by 1.2 percent vis-à-vis the major trading partners. Relatively low interest rates and high cash flows likewise contribute to the favourable investment climate in Austria. WIFO expects an overall increase of investment of 3.9 percent in real terms for 2000. According to the recent investment survey, manufacturing firms plan to invest ATS 87.6 billion, i.e., 4 percent above the 1999 level. Several firms plan major investment projects (petroleum, metals, electronics, chemical products and transport). The increase in investment is expected to be highest in sectors producing investment goods (+20 percent), non-durable consumer goods (12.6 percent), food and beverages (10.9 percent) and transport equipment (10.8 percent). Producers of intermediate products plan approximately the same volume of investment as in 1999 (–0.7 percent) whereas producers of durable consumer goods intend to reduce their investments by 21.7 percent. The construction industry is expected to expand by 1.5 percent in nominal terms in 2000 and plans investments in plants and machinery of ATS 4.05 billion, which amounts to just two thirds of the 1999 volume. One reason for the pessimistic investment plans may be the envisaged reduction of the public deficit which has made civil engineering firms – expecting to be affected most – to curtail their investment plans. Public electricity utilities cut investments by 14.5 percent. The "Verbund Konzern", the largest electricity supplier in Austria, again plans massive reductions. This has to be seen as a response to liberalisation of the energy markets in Europe. Firms expect that stranded investments will be only partly accepted by the EU Commission, and they are building up balance sheet reserves against this contingency. Transport firms as well as other utilities (gas, water, etc.) will increase their investments by 3.1 percent.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 73 (2000)
Issue (Month): 2 (February)
|Contact details of provider:|| Postal: |
Phone: (+43 1) 798 26 01-0
Fax: (+43 1) 798 93 86
Web page: http://www.wifo.ac.at/
More information through EDIRC
|Order Information:|| Postal: Austrian Institute of Economic Research Publikationsverkauf und Abonnentenbetreuung Arsenal, Objekt 20 A-1030 Vienna/Austria|
When requesting a correction, please mention this item's handle: RePEc:wfo:monber:y:2000:i:2:p:75-85. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ilse Schulz)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.