The latest order statistics indicate that Austria's manufacturing sector might climb out of the cyclical trough in the course of this year. New orders during the last few months were higher than during the same period in 1992 and the stock of orders in November exceeded last year's level for the first time during the current business cycle. Economic activity firmed up in the fall. Manufacturing output remained almost unchanged and the average from September to November was only 1½ percent lower than during the same period in 1992. The recovery in output of semi-finished goods, which generally leads the business cycle, projects a sanguine picture, while production in the textile and apparel industry as well as in the investment goods industry is still on the decline. Austria's exports are still shrinking, though at a lower rate. Austrian exporters performed remarkably well in overseas (particularly in South-East Asia and the U. S.): in November, sales to the "Four Dragons" exceeded last year's level by 19 percent, sales to the U. S. gained 28 percent. The rise in the stock of foreign orders in a number of industries holds forth the hope that exports will soon recover. A stable upward trend in Germany is, however, an important precondition for such a development. Economic activity in Germany has been relatively favorable during the last few months, though the discrepancy between rising foreign demand and weak domestic orders remains large. The risk that the lack of consumer confidence will impair the expected upswing is still palpable. The improved order situation is also reflected in WIFO's business survey. A preliminary analysis based on a sample of 400 reports shows that in January manufacturing firms took a more optimistic view of the current situation than in October. For the first time expectations of an increase in production predominate. With a growth rate of 10 percent, civil engineering was the mainstay of the construction sector and helped to largely offset the slump in the export industry. Multi-story new residential construction also gained, while the demand for private non-residential construction remained weak. Retailers again suffered a decrease in sales (adjusted for price changes) in the fall, with part of the reduction due to the slack in tourism. The weakness in the export business dampened turnover in wholesale trade. Private consumption expenditures were propped up, however, by the vigorous demand for services (for housing services in particular). Inflationary pressure remained strong despite stable prices at the producer and wholesale level. For the third consecutive month, the rate of inflation was 3.5 percent in December, just ½ percentage point below the rate at the beginning of the year. The inflation rate of industrial products in the CPI remained relatively high at 3.2 percent; prices of private services gained 5.7 percent. Increases in public charges accelerated in the course of the year (December 4.9 percent), while prices of energy and food helped to dampen inflation: lower energy prices reduced the rate of inflation by 0.4 percentage points at the end of the year. In the labor market, the cyclical downturn, combined with the pressure to reduce costs, resulted in a massive loss of manufacturing jobs (October —37,000 or —7 percent compared to last year). These losses were, however, nearly offset by employment gains in the public service, health services, finance, insurance and real estate, and construction. Given the present slack in economic activity, the trend in unemployment is rather favorable: the increase in the number of jobless has slowed down significantly, from +40,000 in March 1993 to +11,000 in January 1994.
Verbesserte Auftragslage; New Orders in Manufacturing Point to Recovery
In order to set up a list of libraries that you have access to,
you must first login
or sign up.
Then set up a personal list of libraries from your profile page by
clicking on your user name at the top right of any screen.