English, Article edition: Industrialized Areas Favored by Cyclical Upturn. Economic Development of the Austrian Federal States in the Second Quarter 1995 Peter Mayerhofer

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Physical Description
  • article
Language
  • English

Edition details

Title
  • Industrialized Areas Favored by Cyclical Upturn. Economic Development of the Austrian Federal States in the Second Quarter 1995
Author
  • Peter Mayerhofer
Physical Description
  • article
Notes
  • The regional business cycle pattern continues to be formed by developments in manufacturing industry. The composition of overall demand benefits traditional industrial areas in western and southern Austria, while growth in the East has slowed markedly in recent months. Like in the first three months of the year, the western region of Austria recorded the highest rate of growth also in the second quarter (non-agricultural GDP rising 3½ percent year-on-year), while activity in the South accelerated to almost the same pace (+3.2 percent). In the East, however, growth abated to only 1.8 percent. As so often, this pattern is shaped by the performance of manufacturing industry. Strong demand for semi-manufactures and investment equipment benefits mainly the capital-intensive branches of industry and hence traditional industrial locations, mainly in Upper Austria and Styria. Regions with consumer goods-oriented industries as prevailing in eastern Austria, are disadvantaged due to structural problems affecting mainly the production of non-durables. Good economic performance of the western region may chiefly be ascribed to the higher competitiveness of its export industries, but other sectors like construction or industrial services are also contributing. Thus, the favorable development of this part of Austria appears to have a firm base. However, in the southern region, buoyancy is mainly relying on manufacturing industry and its upstream suppliers, together accounting for about 80 percent of output growth. Large parts of the service sector receive little or no stimulus from the upswing in industry leaving overall expansion of GDP in the south on a narrow base. With the industrial boom seeming to have passed its peak, the cyclical upswing in southern Austria may prove short-lived. In the eastern region, the manufacturing sector hardly plays the role of a growth engine. While some firms benefit from the new dynamism in neighboring transition countries, others are confronted with severe adjustment problems due to the wide gap in production costs between the two sides of the Austrian borders. The service sector cannot offset the weakness in manufacturing, as retail trade and construction are suffering from sluggish demand. Within the three major regions, growth rates of the Federal states differ markedly. States with above-average share of manufacturing industry exhibited the highest rates of output growth: Upper Austria +4.6 percent, Styria +2.5 percent, Vorarlberg +3.9 percent, Lower Austria +2.5 percent. The lower ranks were held by the states exhibiting a more service-oriented supply structure: Tyrol +2.2 percent, Salzburg +1.8 percent, Vienna region +1.7 percent. As in the first quarter 1995, the structurally weak states of Carinthia (+0.9 percent) and Burgenland (–1.2 percent) were clearly trailing behind. The previous modest employment gains have come to a halt. Increases in output are accommodated by higher productivity even in service activities. Next to the Vienna region (–1.1 percent), where employment has been falling since the beginning of the year, the number of jobs declined year-on-year in the third quarter 1995 also in Carinthia (–0.4 percent), Salzburg (–0.5 percent) and Tyrol (–0.1 percent), with unemployment heading upwards. Modest employment gains in Lower Austria (+0.7 percent), Styria (+0.7 percent), Upper Austria (+0.4 percent) and Vorarlberg (+0.4 percent) are in line with output developments, while in the Burgenland (+0.8 percent) they imply a fall in labor productivity.
  • Industriestandorte in der Hochkonjunktur begünstigt. Die Wirtschaft in den Bundesländern im II. Quartal 1995; Industrialized Areas Favored by Cyclical Upturn. Economic Development of the Austrian Federal States in the Second Quarter 1995
  • RePEc:wfo:monber:y:1995:i:11:p:685-690
Language
  • English
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