Austria's Economic Strength: The Power Of Exports

Austria has a strong economy, ranking as the 13th richest country in the world in terms of GDP per capita. The country's economic success is driven by a diverse range of exports, including machinery, electrical equipment, vehicles, pharmaceuticals, and iron and steel products. In 2023, Austria exported US$223.9 billion worth of goods globally, with Germany, the United States, Italy, and Switzerland being its top export destinations. Austria's exports are closely linked to its strong industrial and manufacturing sectors, which cover a wide range of fields such as mechanical engineering, automotive, pharmaceuticals, and electronics. Additionally, Austria has a thriving service sector, contributing approximately 70% of the country's gross value added, with tourism being a significant component.

Machinery and computers

The machinery and computer exports from Austria encompass a diverse range of products, including engines, turbines, pumps, industrial machinery, computers, and optical readers. These products are sought-after globally, with key trading partners such as Germany, the United States, and Switzerland. The annual export volume for machinery and mechanical appliances alone is estimated at around 15 billion euros ($17 billion).

Austria's strength in this sector is built upon its focus on high-quality manufacturing and innovation. The country has a strong tradition of producing advanced machinery and mechanical appliances, leveraging its geographical proximity and strong trade relationships with neighbouring countries, particularly Germany. This has allowed Austria to establish itself as a key player in the international trade arena for machinery and computers.

The positive trade balance in machinery and computers highlights Austria's competitive advantage in this sector. The country's exports exceed its imports, resulting in a net export value of US$10.5 billion in this category, a significant increase of 50.4% since 2022. This indicates that foreign spending on Austrian machinery and computers is higher than Austria's spending on similar foreign products.

Austria's machinery and computer exports are a driving force in the country's economy, contributing to its overall economic growth and development. The country's expertise, innovation, and strong trade relationships have positioned it as a prominent player in this sector, fostering its competitiveness in the global market.

Electrical machinery and equipment

Austria's electrical machinery and equipment exports include a range of products, such as electrical converters and power units, electric motors and generators, solar power diodes and semiconductors, and insulated wire and cable. These exports are part of the broader category of electrical machinery and electronics, which also includes broadcasting equipment, telephones, integrated circuits, and electric transformers, among others.

The growth in Austria's electrical machinery and equipment exports has been impressive, with a 29.7% increase from 2022 to 2023. This growth has contributed to the overall expansion of Austria's exports, which rose by 9.9% year over year. The country's total exports in 2023 were valued at US$223.9 billion, a significant increase from the US$171.5 billion recorded in 2019.

Austria's main export partners for electrical machinery and equipment include Germany, the United States, Italy, Switzerland, and Poland. These countries account for a large portion of Austria's total exports in this category. In addition, Austria's exports in this sector benefit from its proximity to Central and Eastern European states, with the share of exports to these regions reaching 19.95% in 2023.

The strength of Austria's electrical machinery and equipment exports can be attributed to several factors. Firstly, the country has a highly developed industrial sector, with many global competitors in fields such as iron and steel works, chemical plants, and oil corporations. Secondly, Austria's membership in the European Union has provided access to the European Single Market and attracted foreign investors. Finally, the country's strong labour movement and efficient social security system have contributed to a skilled workforce and stable economic environment.

Vehicles and engines

Austria's exports are a key part of its economy, and vehicles and engines are a significant component of this. In 2023, vehicles were Austria's third-largest export category, generating $22.1 billion (9.9% of total exports). This includes automobiles, which were the country's top individual export product, valued at $7.72 billion.

Austria's largest trading partner for motor vehicles is neighbouring Germany, which received the majority of Austria's vehicle exports in 2022, worth around 6.6 billion euros. The United States and China are the next largest destinations for Austrian vehicle exports.

In addition to whole vehicles, Austria also exports vehicle parts and accessories, which contributed $4.97 billion to the country's exports in 2022. This includes automobile parts and accessories, which were among the country's top 100 exported goods in 2023.

The automotive industry is a major part of Austria's economy, with a production value of over 11 billion euros in 2022. The sector employs many Austrians, with motor vehicle manufacturing providing jobs for thousands of people.

Pharmaceuticals

Austria has one of the highest per capita expenditures on pharmaceuticals worldwide, with an ageing population driving demand. The country also has a universal healthcare system, with close to 100% of the population covered by social health insurance, which includes coverage for pharmaceutical needs. This has created a stable market for pharmaceutical companies, with strong domestic production volumes and a consistent demand for drug precursors.

The Austrian pharmaceutical market is expected to undergo significant changes in the coming years due to the expiration of patents for several key drugs. This presents opportunities for generic drug manufacturers, particularly from the United States, to capture a greater market share. The market for generic drugs in Austria is gradually growing, rising to 59% in 2023 from 48% in 2017. However, the lack of a price signal for generics and the statutory reimbursement system that automatically reduces prices for name-brand drugs upon patent expiration are challenges that the industry needs to address.

Austria's largest import partners for pharmaceuticals are Germany, Switzerland, Ireland, the United States, and Hungary, while Germany, the United States, and Belgium account for nearly half of its pharmaceutical exports. The country's exports of medicinal and pharmaceutical products have shown a positive growth trend, reaching a record high of USD 10,497,216.422 in December 2023.

Iron and steel

Austria's iron and steel exports include both raw materials and finished products. The country's iron and steel sector is home to several large industrial enterprises that employ thousands of people. These businesses have contributed to Austria's economic growth and development, particularly in the post-World War II era.

The strength of Austria's iron and steel industry can be attributed to several factors. Firstly, Austria has a strong industrial base, with a history of investing in and developing its manufacturing sector. Secondly, the country's proximity to Central and Eastern European states has facilitated trade and economic networking, with a significant share of Austrian exports going to these regions. Additionally, Austria's membership in the European Union has provided access to the European Single Market, attracting foreign investors and further boosting the iron and steel industry.

The iron and steel industry's contribution to Austria's economy extends beyond its direct exports. The industry creates indirect economic benefits through its integration with other sectors, such as automotive parts and machinery manufacturing. This integration fosters synergies and strengthens Austria's overall industrial sector. Moreover, the iron and steel industry's performance has a ripple effect on the country's economic indicators, such as its unemployment rate, which averaged 5.107% in 2023.

In conclusion, iron and steel exports have played a crucial role in Austria's economic strength. The industry's combination of large-scale enterprises, integration with other sectors, and strategic trade relationships has made it a cornerstone of the country's economic landscape.

Frequently asked questions