English, Article edition: Clear Signs of Industrial Revival Markus Marterbauer

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Physical Description
  • article
Language
  • English

Edition details

Title
  • Clear Signs of Industrial Revival
Author
  • Markus Marterbauer
Physical Description
  • article
Notes
  • The economy in Europe continues its reluctant recovery, hampered by weak domestic demand. In Austria, it is chiefly the primary and technical processing industries which report an increasing inflow of new orders and greater production expectations. Retail sales are stagnant, overnight guest figures continue to decline. The labor market is beginning to show signs of improvement. Findings of the WIFO business cycle test indicate that the upturn of early 1996 is set to continue on a steady course. By April, industries had become decidedly optimistic in their production expectations. Typically for the early phase of an upswing, demand is rising most strongly in the primary industry which profits from restocking by other industries. Technical processing industries similarly registered a marked increase in order bookings, chiefly from abroad. For production sectors which cater mainly to domestic demand (traditional consumer goods industries and construction suppliers), the intake of new orders was much less pronounced. International demand has developed favorably in almost all of Europe over the past months. Business is profiting from continued brisk expansion in the US and from the strength of the dollar, which has added almost one quarter in value over the Schilling and DM since early 1995. Demand from CEE countries has somewhat slackened because high current account deficits have led to measures to curb imports (e.g. in the Czech Republic). In spite of good external demand, the investment upswing in Europe – and especially in Germany – does not yet appear to be self-sustaining, because of the weak demand for consumer goods and construction materials. The bad situation of the labor market and restrictive budgetary policies have a highly dampening effect on internal demand. In Austria, the slow recovery has some – very modest – effect on the labor market. In the physical goods production sector, job drainage was slowed down to –10,000 against the previous year. Seasonally adjusted, industrial labor demand is stagnating, although some companies (e.g. in the technological sector) appear to be rehiring again. The higher job rate for the construction industry is due less to any economic revival than to the relatively clement spring weather. Labor demand continues to rise steeply in the legal and business services (including loan workers) and health care. Retail traders appear to have had stagnating sales in the first quarter. Demand sagged in particular for durable consumer goods. Nevertheless their employment rate was slightly better than in the previous year (+2,000). The tourist industry was unable to prolong its good performance of the last months of 1996 (the result of excellent snow conditions). In January and February overnight guest rates were markedly lower than in the previous year, although the situation appears to have improved in March owing to the early date of the Easter holidays, which is incidentally the main reason for the minor rise in employment during the first quarter (+2,000). Since February, the number of registered unemployed is lying below the previous year's level. In April, seasonally adjusted, the unemployment rate is 4,4 percent of the economically active population according to Eurostat, or 6,8 percent of the dependently employed population calculated by the traditional method. The upward trend in prices continues to decelerate: the inflation rate in March was 1,5 percent. Price increases are primarily due to inputs from transport, lighting and heating (energy tax and rises in the oil price), and construction, rent and maintenance of residential housing. Prices for industrial goods and many services have seen little or no increase.
  • Clear Signs of Industrial Revival
  • RePEc:wfo:monber:y:1997:i:5:p:277-278
Language
  • English
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