22
Management report
Austrian economic trends
Last year, too, the economic trend in Austria remained behind that
of the eurozone in some significant respects. According to the last
projections, GDP growth in 2014 is likely to be a mere 0.4 per cent.
This development had both external and home-grown causes. The
most significant external economic burdens for the export sector’s
prospects are the persistent weaknesses of the eurozone and
geopolitical tensions (Ukraine conflict).
This makes domestic demand all the more important as a driver of
growth. The aforementioned factors, however, are likewise showing
a negative trend. The uncertainty regarding selling opportunities
on the domestic market and abroad is leading to a low level of
willingness to invest among business enterprises. The important
area of private consumption, too, is showing signs of weakness.
The sluggish trend in real incomes is allowing private households
little scope for additional consumer spending. At around 1.8 per
cent, the inflation rate in 2014 was considerably higher than in the
eurozone as a whole. This reflects the greater increase in food
and, in particular, service prices in Austria. The recent substantial
decline in oil prices will have a dampening effect on inflation in
2015 in the form of falling energy prices, although the relatively
large gap between Austria and the eurozone is likely to remain.
The situation on the Austrian labour market, which is currently
shaped by a weak economy and an increasing supply of
labour, will likewise remain difficult. According to the AMS, the
unemployment rate in 2014 was 8.4 per cent, with a slight increase
in 2015 being likely.
All of these factors ought to lead to slightly accelerated growth in
Austria this year, with that growth probably remaining at under 1
per cent. The forecasting uncertainty, however, is very high and
the risks outweigh the opportunities. Factors that were compelling
shortly after the start of the new year (appreciation in the Swiss
franc, change of government in Greece), have naturally not yet
been incorporated into the forecasts.
The economy in Tyrol performed in line with the overall Austrian
economy in 2014 and will probably grow equally strongly (or
weakly) in 2015. The relatively high level of unemployment,
coupled with a high tax burden, continues to inhibit private
consumption.
The hopes of Tyrolean business therefore tend to lie in the export
sector, although this, too, stagnated in 2014. The overall structural
conditions to which reference has already been made (strong USD,
moderate energy prices, etc.) are nevertheless giving grounds for
hope that there will be a (slight) turnaround in 2015 with the export
volume increasing by up to 2 per cent to around 11.1 billion euros.
The slowdown in the overall economic situation, especially in the
autumn, is also reflected in the estimate and mood of the Tyrolean
business community. In this respect, though, there is a marked
difference between service providers and manufacturers. While
40 per cent of service enterprises assess the economic situation
positively, only 30 per cent of respondents in the manufacturing
sector do likewise. As far as the expectations for 2015 are
concerned, service providers, especially in the tourism industry,
are in a considerably more positive frame of mind.
A recovery in the Tyrolean labour market remains unlikely in
2015. In 2014, the unemployment rate (according to AMS) was
6.9 per cent, i.e. below the Austrian average as in previous years.
However, it is – compared to the preceding years – relatively high
and is expected to increase to over 7 per cent in the current year.
