Damon Mcknight
Austria has a highly developed social market economy, ranking as one of the fourteen richest countries in the world in terms of GDP per capita. Vienna, its capital, is the fifth richest NUTS-2 region within Europe. Austria is a member of the European Union (EU) and the Organisation for Economic Co-operation and Development (OECD), and its economy is closely integrated with other EU member countries, especially Germany. The country is also increasingly becoming an international meeting point, with a large number of summits and conferences being held there.
| Characteristics | Values |
|---|---|
| GDP per capita | €46,200 |
| GDP per capita rank in the European Union | 5th |
| GDP per capita rank in the world | 14th |
| Vienna's GDP per capita | €38,632 |
| Vienna's GDP per capita rank in Europe | 5th |
| SMEs in Austria | 358,400 |
| People employed by SMEs in Austria | 2 million+ |
| Economic complexity rank | 10th |
| Economic and monetary union of the European Union (EMU) member | Yes |
| EU representatives | 12 |
| EU assembly of regional and local representatives | 12 |
| International meeting point | Yes |
| Transit country for European energy supplies | Yes |
| Export-oriented fields | Electronics, arts and crafts, tourism |
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What You'll Learn
- Austria's economy ranks 5th in the EU in terms of GDP per capita
- Vienna is the 5th richest NUTS-2 region within Europe
- Austria has a strong labour movement with a large union membership
- Austria's economy is closely integrated with other EU member countries, especially Germany
- Austria is witnessing a strong trend towards organic farming
Austria's economy ranks 5th in the EU in terms of GDP per capita
Austria's economic system is characterised as a free market economy with a strong social focus, taking into account the weaker members of society. As a member of the European Union, Austria's economy is closely integrated with other EU member countries, especially Germany. Austria's membership in the EU has brought economic benefits, attracting foreign investors due to its access to the single European market.
Austria's economy is strongly export-oriented, particularly in the electronics sector, including the production of integrated circuits. The country is also world-renowned for its arts and crafts, including fine handcrafted items, customised jewellery, ceramics, and glassware. Tourism is another vital pillar of the Austrian economy. Austria is increasingly becoming an international meeting point for summits and conferences, and its relevance as a transit country for European energy supplies is growing.
In terms of economic complexity, an index that measures the productive capabilities of large economic systems, Austria ranks 10th in the world. There are about 358,400 SMEs in Austria that employ over 2 million people, many of which are highly specialised in their respective fields.
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Vienna is the 5th richest NUTS-2 region within Europe
Vienna, the capital of Austria, was ranked the fifth richest NUTS-2 region within Europe. The city boasts a high GDP per capita of €38,632. This economic prowess is underpinned by a diverse range of sectors, including finance, consulting, and tourism. Vienna has established itself as a hub for finance and consulting, with its law firms and banks playing a pivotal role in business dealings with new EU member states.
The service sector is the cornerstone of Austria's economy, and Vienna exemplifies this with its robust financial and consulting industries. The city has become a gateway to the East, leveraging its expertise in finance and consulting to foster economic growth. Vienna's economic trajectory has been impressive, with steady growth between 2002 and 2006, ranging from 1% to 3.3%. While growth stagnated at 0% in 2013, it rebounded and stood at 1.5% in 2016.
Vienna's prominence as a financial and consulting hub is further bolstered by its position as a leading destination for international meetings and conferences. In 2019, the Union of International Associations (UIA) ranked Vienna fifth globally for hosting 306 international meetings. The city's conference centers, such as the Austria Center Vienna (ACV) and the Messe Wien Exhibition & Congress Center, accommodate thousands of attendees, contributing to the city's economic vitality.
Tourism also plays a significant role in Vienna's economy and that of Austria more broadly. The city's rich cultural heritage, encompassing theater, opera, classical music, and fine arts, attracts visitors worldwide. In 2001, Austria was the tenth most visited country globally, welcoming over 18.2 million tourists. Vienna's allure as a tourist destination has continued to grow, as evidenced by the 17.3 million overnight stays recorded in the city in 2023.
Beyond the service sector, Vienna's economic landscape is diverse. The city is known for its thriving arts and crafts scene, with handcrafted items, customized jewelry, ceramics, and glassware gaining international recognition. Additionally, Vienna was instrumental in developing Austria's robust healthcare system and pioneering social welfare programs. The city's economic prowess extends across multiple sectors, contributing to its ranking as the fifth richest NUTS-2 region within Europe.
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Austria has a strong labour movement with a large union membership
Austria has a robust labour movement, with a large union membership influencing labour politics. The Austrian Trade Union Federation (ÖGB) has about 1.5 million members, which is more than half of the country's wage and salary earners. The ÖGB has pursued a moderate, consensus-oriented wage policy since 1945, working with various sectors to address social and economic issues in Austria's "social partnership". This has contributed to Austria's peaceful social climate, although there are indications of a potential shift towards a more confrontational approach.
Austria's strong labour movement is reflected in its economic structure, where small and medium-sized enterprises (SMEs) form the backbone of the economy. These SMEs comprise 99.6% of all companies in Austria, employing over 2 million people. The success of these SMEs is attributed to their focus on manufacturing and production, robust in-house research, and a highly skilled labour force enabled by Austria's dual system of apprenticeship and vocational education. This skilled workforce is a key factor in attracting foreign investment and fostering economic growth.
Austria's membership in the European Union (EU) has also played a significant role in its economic development and labour movement. Austria joined the EU in 1995, and its integration with other EU member countries, particularly Germany, has strengthened its economic position. Access to the European Single Market and proximity to emerging EU economies have attracted foreign investors. Additionally, EU membership has brought progress in international competitiveness and infrastructure development, further enhancing Austria's economic standing.
The labour movement in Austria is further evidenced by the country's diverse labour market, with strong sectors including tourism, agriculture, manufacturing, renewable energy, and services. While there are labour surpluses in certain regions and sectors, such as low-skilled positions in hospitality, the overall labour force in Austria remains dynamic and adaptable. The country's representatives on the European Economic and Social Committee and the European Committee of the Regions ensure that labour policies and proposed laws consider the perspectives of employers, workers, and other interest groups.
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Austria's economy is closely integrated with other EU member countries, especially Germany
Austria's economy is a highly developed social market economy, with the country being one of the fourteen richest in the world in terms of GDP per capita. The country has a strong labour movement, with labour unions comprising about 1.5 million members, more than half of the country's wage and salary earners. Austria's largest industry firms were nationalised until the 1980s, but privatisation has since reduced state holdings to a level comparable to other European economies.
Austria's membership in the European Union has had a significant impact on its economy, reducing its economic dependence on Germany and attracting foreign investors. As a member of the EU, Austria has gained access to the European Single Market and has developed closer ties with other EU economies. Germany has historically been Austria's main trading partner, but EU membership has diversified Austria's economic relationships, particularly with aspiring economies within the union.
Austria's integration with the EU began with its participation in the European Economic Area (EEA) in 1992 and its founding membership of the European Free Trade Association (EFTA) in 1960. Austria formally applied for membership in the European Communities (EC) in 1989, and after several years of negotiations, it became a full member of the EU in 1995. This process was supported by Germany, a traditional promoter of Austrian interests.
As an EU member, Austria has representatives in various EU institutions, including the European Council, the Council, and the European Parliament. Austria's membership in the economic and monetary union of the EU has closely integrated its economy with other member countries, particularly Germany. Austria adopted the Euro currency in 1999 and began using Euro notes and coins in 2002, further integrating its economy with the Eurozone.
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Austria is witnessing a strong trend towards organic farming
Austria has a strong economy, ranking 13th in nominal GDP per capita in 2024. Vienna, its capital, was ranked the fifth richest NUTS-2 region within Europe. The country has a highly developed industrialised economy with an important service sector. Austria's economy is closely integrated with other EU member countries, especially Germany.
The country had the world's first organic farm, registered in 1927, based on the findings of the Austrian researcher and anthroposophist, Rudolf Steiner. Today, more than 10% of Austrian supermarket turnover is derived from fresh organic products. Austrian supermarket chains such as "Spar" and "Billa" have strong units dealing with organic products. There are about 150 natural food stores in Austria, and recently, an umbrella organisation called "Verein Naturkostläden Österreichs" (VNÖ) was formed, with about 33 natural food stores as members.
The typical consumer of organic products in Austria buys fruit and vegetables (79%), milk and milk products (61%), and cereals (52%). Consumers of organic products tend to be those with higher incomes and higher education in the urban population.
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Frequently asked questions
Austria ranks fifth in the European Union in terms of GDP per capita.
The most important industries in Austria are food and luxury commodities, mechanical engineering and steel construction, chemicals, and vehicle manufacturing.
Austria's economy is dominated by the service or tertiary sector, which constitutes approximately 70% of the gross value added (GVA).
