Austria has been a Member of the European Union since the beginning of 1995. The process of economic adaptation, which had been launched in January 1994 with Austria’s participation in the European Economic Area (EEA), was thus accelerated. EU membership also opened up prospects for deepening the scope of integration extending beyond economic aspects and including, in particular, trade, agricultural, regional, tax and monetary policies.
As one of the most prosperous and stable EU Member States, Austria offers the best prerequisites in this respect. The Austrian economic system, characterised by a free market economy with a strong social focus that also takes into account the weaker members of society, will be retained in the EU. The same holds true for the tried and tested system of economic and social partnership, which has traditionally played a strong and reconciliatory role in determining wage and price policies.
Having reached the required status of convergence, Austria was among those 11 EU Member States that entered the third stage of the Economic and Monetary Union at the beginning of 1999. The subsequent introduction of euro banknotes and coins on 1 January 2002 marked the highlight of a process of convergence and integration that had lasted many years. By taking this step, Austria had given up the right to pursue a national and independent monetary policy, but at the same time become a member of the world’s second-largest economic area.
Austria is a highly developed industrialised country with an important service sector. The foremost industries are foodstuffs and luxury commodities, mechanical engineering and steel construction, chemicals and vehicle manufacturing. Within the vehicle sector, the production of engines and transmissions is the most important segment, accounting for an export quota in excess of 90%. Austria produces, for instance, some 800,000 engines per year for many major car manufacturers. In the electronic engineering field, the country has made a name for itself with the production of customised electronics products like microprocessors and integrated circuits (chips for airbags, ABS braking systems; components for Airbus airliners and for high-speed trains, etc.)
The primary sector (agriculture and forestry) accounts for only about 2% of Austria’s gross domestic product (GDP). The secondary sector (commodities manufacture, energy, mining) makes up about 31%, while the tertiary sector (services, banking, public services, commerce, transport, tourism) contributes the major share to Austria’s GDP with 67%.
In the field of agriculture the trend is increasingly towards organic farming. With an overall share of 11.9% organic farms Austria occupies a leading position among the EU Member States. In this organic branch of agriculture 88.1% of enterprises are dedicated to livestock farming.
The share in the Austrian national economy made up by the agricultural use of land amounts to 56%, arable farming accounts for 18%, while forestry makes up 44%. The percentage of persons employed in agriculture and forestry amounts to 5.4%.
As regards raw materials and energy generation, Austria can draw on abundant resources. It has deposits of iron ore, non-ferrous metals, important minerals and earths. The constant growth of the industrial sector, however, increasingly requires supplementary imports. This is also true of fuels, energy resources and the electricity generating industry. Austria has its own resources of petroleum and natural gas. The generation of hydroelectric power is constantly being expanded, making Austria the number one country in this sector of energy generation in the European Union.
Austria’s industrial and commercial sectors are characterised by a high proportion of medium-sized companies. Austrian industry covers every branch of manufacture, from basic goods to the labour-intensive production of finished products. The construction of plants and systems (encompassing the planning, delivery and assembly of turnkey production facilities, including the required know-how and operational expertise) is making up an increasingly important share. This field is strongly export-oriented, as is the electronics sector (including, for instance, the production of integrated circuits).
Austria is world-famous for its arts and crafts, most notably fine hand-crafted items, costume jewellery, ceramics and glassware.
Tourism is an essential pillar of the Austrian economy. Austria is a mountainous country with one of the largest unspoilt natural land reserves in Central Europe. Some 33 million visitors came to Austria in 2010, seven out of ten are foreign tourists. Visitors from Germany make up the vast majority of guests in Austria. Apart from Germany, the most important countries of origin in terms of overnight stays were the Netherlands, Switzerland, Lichtenstein, the United Kingdom, Italy and Hungary.
Austria exhibited a positive foreign trade balance in 2011. Exports rose by 7.9%. Imports also increased by 9.2% as compared to the previous year. This was reflected in a plus of 0.4 billion euros. This trend of foreign trade increases is continuing within the EU, although the trade balance deficit reached 2.2 billion euros. As regards foreign trade with third countries, Austria achieved a positive trade balance, with 2.6 billion euros on the asset side.
Austria mainly exports machines and vehicles, processed goods (leather and leather products, iron and steel) as well as chemicals. All three groups generated positive growth rates compared with 2010. Supplies for the automotive industry spearhead the industrial articles exported by Austria. Another leading export good of Austria is wine. In 2006, for instance, the merchandise value of Austria’s wine exports amounted to 77 million euros. Austria’s most important trading partners within the EU are Germany, Italy, France and the Czech Republic. Over the last few years Austria has successfully increased its exports to Eastern European markets. The EU accession of the Czech Republic, Poland, Slovakia and Slovenia enabled Austria to increase its export rate by 17.3% in the period from 2003 to 2005. The most important sales market for Austrian products overseas is the USA. Other important trading partners include China, the Russian Federation and Switzerland.
In 2010 unemployment rates in Austria amounted to 4.4%. Compared with the EU average of 9.7%, Austria is thus among the leading countries in terms of low unemployment.
In the global political arena Austria is increasingly developing into a meeting point of nations, which is illustrated by the large number of summits, congresses and conferences held in Austria. At the same time, the country’s relevance as a vital transport link between the economic areas of Europe is increasing. In this context Austria is becoming a major transit country for European energy supplies, including petroleum, natural gas, and electricity.
The dominant economic factors of the 1990s were Austria’s accession to the EU and the substantial foreign trade increase with Eastern European countries. In some areas the extent of economic linkage with these countries exceeds the degrees achieved during the Austro-Hungarian Empire. The last decade of the 20th century was marked by major steps taken to enhance economic efficiency and modernise the Austrian economy. This had become necessary as a result of EU accession and the pressures of globalisation. Decisive importance is therefore being attributed to the energetic continuation of these efforts.
At the beginning of the 21st century, Austria is a modern, self-confident, positive and forward-looking EU Member State.