The Economy Chamber (WKO) has warned from overly positive economic forecasts.
The Institute for Economic Research (WIFO) recently said Austrian enterprises might invest 5.6 billion Euros this year in the domestic economy, 12 per cent more than in 2011. The WKO’s industrial section announced yesterday (Weds) that firms’ spending might not rise as sharply.
WKO officials also made aware of potentially negative effects of the latest budget consolidation package of the government coalition. Social Democrats (SPÖ) and People’s Party (ÖVP) want to reduce the amount of public subsidies dramatically in the coming five years to reduce state debt. Especially the construction industry’s performance could suffer a setback because of the upcoming infrastructure spending cuts.
The Austrian building sector registered 10 per cent fewer staff last month than in March 2011. Most of the industry’s employees are male. Overall, more than 155,000 men had no job in Austria last month. This is an increase of almost six per cent compared to the same month of 2011. The number of jobless women rose by just 2.6 per cent to 109,000 at the same time.
The number of unemployed residents of Austria rose by 4.4 per cent from March 2011 to last month, according to the Austrian Labour Market Service (AMS). Austria managed to remain the European Union’s (EU) employment model student nevertheless. No other EU member state had a lower unemployment rate than Austria (4.2 per cent) in March. The Netherlands recorded a rate of 4.9 per cent. Luxembourg followed in third place with 5.2 per cent.
Experts of the WKO – which is headed by Christoph Leitl – said that the domestic economy was not dynamic at the moment but added that a downward trend was not in sight. Austria’s export trade might, according to the WKO, experience certain difficulties in the coming months because of the weak economic state of some of its key business partners. The lion’s share of Austrian exports goes to EU countries. North and South America were identified by the WKO as promising regions to operate in for Austrian companies.
Already last year, People’s Party (ÖVP) Economy Minister Reinhold Mitterlehner appealed to exporting firms based in Austria to consider doing business in up-and-coming economies in Asia and South America. Mitterlehner stressed that over 80 per cent of exports go to other European countries.
Mitterlehner explained that he wanted to increase the value of exports to markets outside Europe by 13 per cent to 30 per cent by 2020. Mitterlehner said he was determined that many Austrian companies could succeed in Brazil, Russia, India and China – the so-called BRIC states – and other countries.
Around 40,000 Austrian enterprises are currently engaged in export operations, up sharply from 2002 when only 15,000 firms offered their products and expertise abroad. Austrian companies sold goods and services worth 122.5 billion Euros outside Austria in 2011. The value of experts has never been higher, according to the WKO.