First Quarter of 2022: Economy Grew with Strong Industrial Activity

29.04.2022

WIFO Flash Estimate

According to the latest WIFO Flash Estimate, Austria's economic output rose by 2.5 percent in the first quarter of 2022 compared with the previous quarter. In addition to increases in services, growth was driven by the positive development in industry and construction. On the demand side, both foreign trade and investment recorded positive momentum. Consumer spending by private households stagnated.

According to first calculations, GDP increased by 2.5 percent in the first quarter of 2021 compared with the previous period (key figure according to Eurostat). In a year-on-year comparison, this represents a significant increase of 8.7 percent compared with the first quarter of 2021, where restrictive measures to contain the COVID-19 pandemic (third lockdown) had weighed on the economy. Also, in the previous quarterly comparison, increases in value added in the service sector are discernible following the lifting of measures (fourth lockdown in the fourth quarter of 2021), albeit to a lesser extent.

Positive impetus in the first quarter of 2022 came primarily from strong industrial and construction activity. Value added in industry (ÖNACE 2008, sections B to E) rose by 4.0 percent in the first quarter (fourth quarter of 2021 –0.3 percent), and in construction by 2.6 percent (fourth quarter of 2021 –1.9 percent). According to first data, there are still few dampening effects from the war in Ukraine, although companies' uncertainty about future developments is high. Value added also increased in the consumer-related service sectors. In the sector trade, accommodation, food service activities and transport it increased by 3.1 percent (fourth quarter of 2021 –5.2 percent); in other services, which include personal services, arts, entertainment and recreation, the quarterly increase in value added was 9.7 percent (fourth quarter of 2021 –8.8 percent). The development of value added continued to be supported by other business services and public administration.

Consumer demand by households (including private non-profit institutions serving households) stagnated in the first quarter of 2022, and government final consumption expenditure also failed to expand after three quarters of growth.

External economic momentum was positive in the first quarter. Overall, exports rose by 4.1 percent and imports by 5.5 percent compared with the previous quarter. Investment demand was also expansive, with gross fixed capital formation up 4.2 percent quarter-on-quarter.

Important information

The WIFO Flash Estimate is a first estimate for the past quarter. It is based on the Quarterly National Accounts of Statistics Austria and includes GDP as well as components in the form of seasonally and working-day adjusted rates of change compared with the previous quarter (key figure according to Eurostat standard).

On 2 June 2022, Statistics Austria will publish quarterly GDP data and main aggregates for the first quarter of 2022 based on more complete data.

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Mag. Sandra Bilek-Steindl

Research groups: Macroeconomics and European Economic Policy
© George Pastushok/Unsplash
© George Pastushok/Unsplash