Business Monitor International

Austria Business Forecast Report

Published 16 December 2014 | Quarterly

  • 37 pages
  • Instant access to your report online and PDF format through your account library
  • Includes 3 free updated quarterly reports
Austria Business Forecast Report

Core Views

  • During 2015-2016 we expect subdued but stable growth. However, the drivers of this growth will change from previous years.

  • Weak external demand, particularly in the eurozone, will cause a reduction in net export contributions to growth compared to 2012-2013. Private consumption will remain stable with a significant increase not expected until 2016. Net exports will have a reduced yet positive contribution. This diminished export demand will cause a drag on investment and capital formation over the coming years.

  • It remains our view that the cabinet reshuffle and change in leadership of the Austrian People's Party (ÖVP) will not significantly alter the functioning of the 'grand coalition'. However, we expect to see continued gains from opposition parties over the course of 2015-2016 particularly the far-right FPÖ party given their hard-line stance on Muslim integration and asylum seekers which remains a highly topical issue in Austria at present.

Key Risks To Outlook

  • If conditions affecting external demand were to deteriorate further this may cause Austrian economic growth to materialise later than expected. A subsequent effect of this may be the curtailing of labour costs in export focused industries, leading to an increase in unemployment and a reduction in household consumption. On the upside, a significant improvement in external economic activity, particularly in the eurozone, would quicken the pace of an Austrian recovery though this possibility does not align with our respective forecasts.

  • On the political front, in light of growing support for the far right Freedom Party in 2014, should this party gain significant traction or be elected into a position of power we feel this would negatively affect Austria on an international level both economically and politically.

Macroeconomic Forecasts (Austria 2012-2015)
Indicator 2012 2013 2014f 2015f
Real GDP growth, % y-o-y 0.9 0.2 0.9 1.4

Table of Contents

Executive Summary
Core Views
Key Risks To Outlook
Chapter 1: Political Outlook
SWOT Analysis
BMI Political Risk Index
Domestic Politics
Growing Support For Far Right Unlikely To Go Away
The growing support for the far-right Freedom Party is a trend which is unlikely to dissipate over the coming year, as Austria prepares to
The growing support for the far-right Freedom Party is a trend which is unlikely to dissipate over the coming year, as Austria prepares to
hold regional elections in 2015
This is due to its continual success in using the immigration issue to attack the long standing standing
SP---VP coalition government
Chapter 2: Economic Outlook
SWOT Analysis
BMI Economic Risk Index
Economic Activity
Austria's Economic Malaise Set To Continue
Following disappointing economic growth in 2014 Austria's economy will grow moderately in 2015 after which we see the pace of
Following disappointing economic growth in 2014 Austria's economy will grow moderately in 2015 after which we see the pace of
growth levelling off
Consumption driven growth will also remain stifled in the near-term by weakness in the labour market
Table: Economic Activity
Eurozone Fiscal
Storing Up Fiscal Problems For The Future
Member by member, the eurozone is abandoning fiscal targets amid political pressure
The main exception is Germany, which
further illustrates the profound schisms within the euro area
We expect the European Central Bank (ECB) to become increasingly
interventionist as official policy relies heavily on monetary stimulus
Chapter 3: Operational Risk
SWOT Analysis
Chapter 4: Key Sectors
Table: Steel Production & Consumption
Table: Steel Industry Historical Data
Other Key Sectors
table: Pharma Sector Key Indicators
table: Telecoms Sector Key Indicators
table: Infrastructure Sector Key Indicators
table: Autos Sector Key Indicators
Chapter 5: BMI Global Assumptions
Global Outlook
Warning Signs Growing
Table: Global Assumptions
Table: Developed States, Real GDP GrowtH, %
Table: Emerging Markets, Real GDP Growth, %

The Austria Business Forecast Report helps businesses with market assessment, strategic planning and decision making to promote growth and profitability in Austria and is an essential tool for CEOs, Chairmen, Finance Directors/CFOs, Managing Directors, Marketing/Sales Directors with commercial interests in this emerging market.

An influential new analysis of Austria's economic, political and financial prospects through end-2018, just published by award-winning forecasters, Business Monitor International (BMI).

Key Uses

  • Forecast the pace and stability of Austria's economic and industry growth through end-2018.
  • Identify and evaluate adverse political and economic trends, to facilitate risk mitigation.
  • Assess the critical shortcomings of the business environment that pose hidden barriers and costs to corporate profitability.
  • Contextualise Austria's country risks against regional peers using BMI's country comparative Risk Rankings system.
  • Evaluate external threats to doing business in Austria, including currency volatility, the commodity price boom and protectionist policies.

The Austria Business Forecast Report by Business Monitor International (BMI) includes four major sections: Economic Outlook, Political Outlook, Business Environment and Key Sector Outlook.

Economic Outlook:

How will the Austria economic policy-making and performance impact on corporate profitability over 2014-2018?

BMI provides our fully independent 5-year forecasts for Austria through end-2018 for more than 50 economic and key industry indicators. We evaluate growth, and also forecast the impact of economic management.

Economic Outlook Contents

The Austria Business Forecast Report features BMI's forecasts with supporting analysis for 2014 through to end-2018, set against government views and BMI's evaluation of global and regional prospects.

Key Areas Covered:


  • Full 10-year forecasts with data - for key macroeconomic variables including GDP (real growth and per capita), population, inflation, current account balance and the exchange rate.
  • BMI's comprehensive Risk Rankings system - rates each country worldwide for economic and political risk, and rates the business environment, within a global and regional context.

Written Analysis:

  • Economic Activity - real GDP growth, employment, inflation, consumption (retail sales and confidence).
  • Balance of Payments - trade and investment, current and capital account.
  • Monetary Policy - interest rate trends (bank lending and deposit rates) and inflation (producer price and consumer price).
  • Exchange Rate Policy - currency controls, foreign investment flows, exchange rates and foreign exchange reserves.
  • Fiscal Policy - macroeconomic strategy and policies, government finance and tax reforms.
  • Foreign Direct Investment - approvals, inflows and climate.
  • External Debt - debt profile (short and long-term plus public and private sector exposure).
  • Global Assumptions - forecasts for each year to end-2018 covering: major commodities, growth in key regions, inflation, and interest and exchange rates, in the United States, Japan, China and the eurozone.

Key Benefits

  • Rely upon BMI's 100% independent forecast scenarios for Austria and underlying assumptions - we take no advertising and are privately-owned.
  • Exploit the benefits of BMI's comprehensive and reliable macroeconomic database on Austria, sourced and fully maintained by BMI from an extensive network of private sector, government and multilateral contacts.
  • Gain key insights into the current and future direction of government economic policy, which could significantly affect your company's business prospects, from BMI's team of analysts and economists.

Political Outlook:

What are the political risks to doing business in Austria over the next 5-years?

BMI's Austria country Risk Rankings evaluate the short- and medium-term threats to political stability.

Political Outlook Contents

  • SWOT Analysis for the Austria Market - Political Strengths, Weaknesses, Opportunities and Threats facing Austria.
  • Political Stability and Risk Assessment - BMI's Risk Rankings assess explicit short- and long-term risks to political stability; latest ankings, rankings and trends for Austria's risk are compared with regional and global averages.
  • Current Administration and Policy-making BMI assesses the threats to the continuity of economic policy, and likely changes to the business operating environment.

Key Benefits

  • Benchmark Austria's risk profile against its neighbours, the global and regional average, allowing easy comparison of risks between key business markets.
  • Identify, evaluate and anticipate political and security risks to the business environment, and to your company's current operations and future plans.
  • Gain valuable insights into government and policy-making, through BMI's specialist team of analysts and economists, and their network of private and public sector sources.

Business Environment

Business Environment Risk Rankings with SWOT Analysis - Business Environment Risk Rankings for Austria, benchmarked against rankings for regional neighbours.

Country Competitiveness - Competitiveness of Austria's business operating environment in supporting corporate growth and profitability, compared with regional neighbours.

Business Environment Contents

  • Domestic Environment - Transparency, cronyism and corruption; labour market flexibility; corporate tax burden; interest rate levels; sophistication of banking sector and stock market; levels of business confidence; infrastructure and IT.
  • Foreign Direct Investment - Analysis of foreign investment regime; foreign ownership laws; attractiveness of business environment to foreign investors.
  • Foreign Trade - Analysis of trading environment, government trade policy, liberalisation measures, tariffs and membership of trade areas.

Key Benefits

  • Assess your company's evolving exposure to country specific operational and business risks, using BMI's in-depth analysis of the legal and regulatory business environment.
  • Understand your market's comparative strengths and weaknesses in the key areas of commercial infrastructure and business institutions, using BMI's proprietary global Business Environment Risk Rankings.

Key Sector Outlook

Which industry sectors in Austria will grow fastest, and where are the major investment opportunities in the market?

BMI's identifies investment opportunities in Austria's high growth industries including automotives, defence & security, food & drink, freight transport, infrastructure, oil & gas, pharmaceuticals & healthcare and telecommunications & IT.

Key Areas Covered:

  • Market Overview - Size and value of each industry with developments over 2009-2013, covering major industry key performance indicators (KPIs) that have impacted company performance.
  • 5-year Industry Forecasts - Forecasts for each year over 2014-2018, using BMI's proprietary industry modeling technique, which incorporates all key domestic and international indicators - including economic growth, interest rates, exchange rate outlook, commodity prices and demographic trends - to provide fully integrated forecasts across, and within, each industry.
  • Demand- and Supply-Side Data/Forecasts - BMI's industry data covers both the output of each industry and the domestic demand, offering clear analysis of anticipated import/export trends, as well as capacity growth within each industry.

Key Benefits

  • Target strategic opportunities in high growth industries, which are benefiting from global mega trends, and thus offer strong investment and growth opportunities.
  • Compare the growth path of different industries to identify which are best placed to benefit from domestic and international economic prospects, and which have historically suffered from volatile growth trends - a key indicator of future risks.

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The sections that I find most interesting and useful are the macroeconomic data and forecasts for the country, top export destinations and economic activity. The indicators/analysis of these areas helps us orient our thinking, our assumptions and, consequently, our decisions in the commercial area.

Country Manager, DHL Express