Lower Austria has been the fastest growing Austrian province since 1988. This growth has been favored by the opening of the borders of Lower Austria's Central and Eastern European neighbors, the relocation of economic activities from Vienna to the suburban areas of Lower Austria as well as Austria's integration into the European Union. In particular, during the period from 1994 to 1996 growth exceeded the Austrian average by 1.2 percentage points. Despite this growth, per-capita income as well as average wages in Lower Austria remained below the Austrian average in 1996. Gross value added was only 85.7 percent of the Austrian average in 1996, average monthly wages were 97.9 percent of the national average. Average productivity in manufacturing, however, was above the national average. In particular, sectors with high localization exhibit higher than average productivity, which points to the continued competitiveness of the core industrial activities of the province. Growth has been accompanied by rapid structural change. Although only six (out of 21) sectors showed a below-average growth rate in the period of 1988-1996, indicators of structural change are higher than for other large industrial provinces of Austria: The aggregate change in sector shares has been relatively high and data on the establishment of new enterprises also indicate substantial structural change at the enterprise level. The service sector, starting from a low level in 1988, has shown the most positive development. It has increased its share of the gross value added from just over 50 percent to almost 60 percent from 1988 to 1996. Growth in Lower Austria has been quantity-driven rather than price-oriented. This indicates that growth and structural change have not raised the capability of Lower Austrian firms to increase prices. The structural problems of the Lower Austrian economy in the production of high value added products thus remain despite the favorable development. Furthermore, regional disparities in the province remain large. Regional per-capita gross value added disparities at the NUTS 3 level have not narrowed in Lower Austria since 1988. In the labor market the province holds second place in terms of regional mismatch at the NUTS 3 level in all of Austria, although unemployment rates are well below the national average. Forecasts of the future development of Lower Austria indicate further above-average growth for the province. The European Economic Research and Advisory Consortium, for instance, predicts an average growth differential of +0.2 percentage point relative to the Austrian average until the year 2002.