The cyclical forces driving the economy are getting stronger. Exports and output in manufacturing post high gains, and an increasing number of enterprises is viewing the economic situation with optimism. Most economic indicators suggest that the present upturn is proceeding at a faster pace than the recovery after the recession of 1982-83. The main problem areas continue to be the tourism sector, the high level of unemployment, the federal budget, and the current account. The improvement in the global economy is having a positive impact on the Austrian economy. In the U.S. the upswing is still going strong; in Europe, the economic climate has improved markedly and the German economy is being boosted by foreign orders. All these impulses have buoyed Austria's sales abroad. In the first half of 1994, the export sector managed to expand exports by 7 percent compared to the same period in 1993. The manufacturing sector raised production by 4½ percent to satisfy domestic and foreign demand. According to the most recent WIFO survey of July, the business climate has shown further improvement. In the basic goods industries, in the chemical industry, and in the engineering industries production increases are expected. Only the traditional consumer goods industries forecast stagnation in output. Capacity utilization has increased further in recent months. The highest utilization rates are reported by the basic goods sector and the construction materials industries. The sanguine expectations on the part of manufacturing firms and the increase in foreign orders suggest that the pickup in economic activity might gain in breadth and pace. The construction sector continues to be a mainstay of economic activity. In May, the value of new construction exceeded last year's level by 9 percent. The sectors posting the highest gains continue to be residential construction and civil engineering. Consumer price inflation is slowing down. The annual rate of inflation, slightly higher than 3 percent at the beginning of the year, fell to 2.8 percent in July. Food prices and prices of travel and lodging contributed most to the slowdown in inflation. Unlike in earlier upturns, the labor market reacted promptly to the current upswing. Employment in manufacturing stabilized in the spring; this marks the first time since 1990 that the number of jobs in manufacturing (seasonally adjusted) is not decreasing. In August, total employment surpassed last year's level by 17.000 (+½ percent). Unemployment dropped by 10.000 persons. At the present time, tourism is one of the weakest sectors of the economy. There has been no sign of a recovery at all. Overnight stays by foreign tourists plunged in the early summer, a belated consequence of the European recession, of the devaluation in competitor countries, and of cheaper air travel.
Konjunkturaufschwung bekommt deutlichere Konturen; Cyclical Upswing is Gaining Momentum
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