Industrial Activity Defies Supply Bottlenecks and Strong Price Increases

Foreign trade in goods in 2021 was largely unaffected by the course of infection and the economic shutdowns resulting from the COVID 19 pandemic. Exports and imports expanded strongly, but material shortages as well as delays in delivery dampened growth in the second half of 2021. The price hikes in international raw materials and energy markets significantly worsened the terms of trade and negatively affected the balance of trade, as did shifts in demand toward import-intensive consumer durables and pharmaceutical products. The manufacturing sector developed very dynamically from March onwards. Capacity utilisation increased significantly. As a result of the distortions in international container transport, supply bottlenecks became the most important obstacle to production for Austrian manufacturers. The shortages slowed down the favourable industrial cycle but did not bring it to a standstill. Investment activity recovered in 2021, with all categories developing robustly. Both tangible equipment investments and intangible fixed asset investments increased. However, the total investments have not reached the pre crisis level.