Strong Growth in 2018 – Industrial Activity Weakens at a High Level. Austria's Economy 2018

The Austrian economy grew by 2.7 percent in 2018, slightly more than in the previous year (+2.6 percent). However, the growth peak has already been exceeded by the beginning of 2018. Against the backdrop of global trade policy tensions (between the USA and China) and the growth slowdown in the euro area, economy in Austria lost momentum in the second half of 2018. Besides the economic slowdown in Italy and France, growth in Germany was dampened by production losses in the automotive industry. Austria's foreign trade developed favourably overall in 2018, but lost momentum towards the end of the year. Domestic demand also made a positive contribution to GDP growth. Consumer demand by private households was again strong, at the same time companies increased their demand for capital goods (machinery, equipment and construction investments). For the second year in succession, the construction industry recorded a very favourable economy. Value added in the manufacturing industry also increased markedly once again, even though the industrial activity weakened at a high level – mirroring foreign trade development. Positive impetus came from the transport sector, other business activities and tourism. Inflation in Austria, measured by the CPI, remained almost constant at 2.0 percent. With the economic boom, the situation on the labour market continued to improve. Employment increased again and the unemployment rate (national definition) fell to 7.7 percent.