After having worsened during the first half of the 1990s, the international unit labor cost position of Austrian manufacturing improved markedly in 1996 and 1997. As a result of continuously high productivity growth and modest increases in labor costs, Austrian unit labor costs fell by 1 percent in 1996, and 5 percent in 1997; the average of its trading partners decreased by 0.2 percent and 2.1 percent, respectively. With the recovery of major trading partners' currencies, the schilling depreciated by 1.5 percent in 1996 and 2 percent in 1997, so that compared to the average of unit labor costs of its trading partners (measured in a common currency), unit labor costs in Austrian manufacturing fell by 2.2 percent and 4.9 percent, respectively.