Austria - Market OverviewAustria - Market Overview
This Country Commercial Guide (CCG) presents a comprehensive look at Austria’s commercial environment, including an analysis of economic, political, and market regulatory factors. Presented annually by an interagency team at the U.S. Embassy Austria, the CCG is intended as a tool for U.S. companies interested in doing business in Austria.
Key facts (2018):
- Population 8.8 million
- Language German
- GDP (per capita) $456 billion ($51,700)
- GDP growth 2.7% (1.7% forecasted for 2019)
- Inflation (CPI) 2% (1.7% forecasted for 2019)
- Inflation (HICP) 2.1%
- Unemployment 4.9%
- Currency Euro
- European Union Member since 1995
Source: Statistics Austria
Despite its small size, Austria is a rich market with the 27th largest GDP and the 14th highest per capita GDP in the world. Its economy is diversified and highly international. Manufacturing accounts for 26% of Austria’s GDP and over 60% of manufactured product are exported. Unemployment rates are modest and social stability is strong. From 2013 until 2017, Austria’s GDP grew steadily, but since has softened somewhat following global trends with a 1.7% growth rate projected for 2019.
Austria and the United States share strong economic and business ties. The United States is Austria’s second largest export market and third most important global trading partner. Over 300 U.S. companies operate subsidiaries in Austria, many drawn in the past to Austria as a regional Central Europe hub, and today more focused on the Austrian market with some also using Austria as a base for providing specialized global production and solutions.The American Chamber of Commerce Austria’s (www.amcham.at) annual Business Barometer Survey of U.S. company members shows that the most important business location factors in Austria are consistently: 1) availability of skilled labor, 2) high quality of life and security, and 3) excellent infrastructure (transport, telecom, energy). Vienna consistently ranks at the top internationally among quality of life scores. Austria is a safe country where democracy and the rule of law are firmly established. Austria’s global business rankings are also among the best worldwide, with the World Bank’s Doing Business Report placing Austria at 26 of 190 countries and Transparency International ranking Austria 14 of 175 countries.
Austria’s economic weaknesses mirror its strengths. Though wealthy, with a population of 8.8 million, there is a natural limit to market potential. U.S. companies face stiff competition in this very open market, both from multinational corporations and from Austrian companies, including over 400 that are considered “hidden champions,” global leaders in their specific business areas. EU-wide considerations including required standards and certifications, as well as exchange rate variability should be considered in business planning.
U.S. companies considering establishing operations in Austria should keep in mind that, while livability is high, so are labor costs. At $40 per hour in 2018, Austria’s hourly labor costs rank the 8th highest in the EU. While Austrian banks with global operations regularly work with larger U.S. corporations, smaller U.S. entities and individuals often have trouble conducting banking activities since many local banks are hesitant to serve clients from the United States due to strict U.S. government regulated reporting requirements.
The Austrian economy is highly internationalized. Total Austrian imports reached $184 billion in 2018 with exports at $177 billion.
Austria’s most important two-way trading partners are Germany, followed by Italy, the United States, and Switzerland. The European Union accounts for 70% of Austria’s foreign trade, with Germany constituting around 30% of that value.
The United States is Austria’s second largest export market after Germany and third largest trading partner worldwide. U.S.-Austria bilateral trade enjoys an upward trend due to close business and industrial connections. According to U.S. Census data, U.S. goods exports to Austria totaled $3.6 billion in 2018. In contrast to U.S. data which tracks direct trade, Austrian government data also captures trade with Austria via in-bond transfers and through distributors in other parts of Europe. Due to this different methodology, Austrian government reports a much larger value of U.S. exports to Austria, totaling $6.7 billion for 2018.
For 2018, U.S. Census data reported that U.S. exports to Austria were led by: pharmaceuticals (up 25%), machinery (up 7%), aircraft and parts (down 21%), chemicals (down 72% for all categories), medical and measuring instruments (up 3%), and electrical machinery and equipment (up 9%).