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Austria has a diverse and robust economy, offering its citizens high living standards and well-developed trading markets. The country's main industries include construction and building, electronics and electrics, tourism, food and drinks, logistics and transportation, automotive and chemical industries, as well as steel and mechanical engineering. International tourism and the service sector are the most important parts of the Austrian economy, with the latter generating the majority of the country's GDP.
| Characteristics | Values |
|---|---|
| Main Industries | Construction and building, electronics and electrics, tourism, food and drinks, logistics and transportation, automotive and chemical industries, steel and mechanical engineering, wood, pulp and paper industry |
| Most Important Sector | Service sector |
| GDP Contribution by Food Sector | 12% |
| Number of Foreign Tourists (2023) | 30.9 million |
| Total Overnight Stays (2023) | 151.2 million |
| Labour Unions | Austrian Trade Union Federation (ÖGB) with a total membership of about 1.5 million |
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What You'll Learn
Electronics and electrics
Austria's electronics and electrics industry is a key driver of future-oriented technologies, including automated driving, the Internet of Things, and Industry 4.0. The country has a world-class ecosystem for microelectronics, with large corporations conducting intensive research activities in collaboration with technology parks, universities, and universities of applied sciences.
The electronics industry in Austria is known for its innovativeness, product diversity, research capabilities, and expertise. It has a significant impact on the country's economy, employing over 60,000 people across approximately 200 companies. These companies include international flagship companies and highly specialized component suppliers such as Infineon, flex, AT&S, IMS Nanofabrication, Lam Research, and TDK.
Austria has a 90% world market share in security chips for passports, a 55% share in optical light sensors, and a 25% share in chips for energy efficiency. The country's strength in this sector is attributed to its expertise in designing and producing integrated circuits, as well as its focus on artificial intelligence and sustainable technologies.
Linz, the capital of Upper Austria, is an important location for the global chip industry. The Austrian Federal Government's allocation of €3 billion for chip research and production under the European Chips Act further emphasizes the country's commitment to strengthening its position as a global hotspot for electronic-based systems.
The electronics and electrics industries in Austria have led to an impressive export ratio of over 69.7%. This sector encompasses various fields, including mechatronics, electrical engineering, car electronics, automotive suppliers, control engineering, and more.
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Food and drinks
Austria's food and drink industry is diverse and internationally renowned. The country's cuisine is known for its hearty and indulgent dishes, with a generous use of meats and root vegetables. Each region in Austria has its own culinary specialties, contributing to the wide variety of Austrian products.
Austrian meals are often leisurely affairs, with conversation and socialisation playing an important role in the dining experience. This cultural aspect is known as "gemuetlichkeit", reflecting a happy and socially accepted mood. Drinking alcoholic beverages with friends and family while eating is a common practice in Austria.
Austrian cuisine showcases a range of local and regional specialties. Viennese cuisine, for example, is based on the cooking traditions of the Habsburg Empire, while other states have their own unique culinary traditions. The country is particularly known for its pastries, such as the Kaiserschmarrn and Apple Strudel, as well as dishes like Tafelspitz and Wiener Schnitzel. Breakfast typically follows a continental style, with bread rolls, jam, cold meats, cheese, and beverages like coffee, tea, or juice.
Austria boasts a thriving cafe culture, with Viennese coffee houses serving a variety of coffee styles, including the Austrian Mokka or Kleiner Schwarzer, similar to espresso but extracted more slowly. Coffee is an integral part of social activities, with Austrians often inviting friends or neighbours over for coffee and cake.
In terms of beverages, Austria has a rich wine culture. Lower Austria, in particular, holds the country's biggest quality-wine territory, with notable regions like Wachau in the North and the Danube region to the west of Vienna. The "Weinstraße" (wine street), an 830-kilometre route through eight distinct wine regions, is a popular destination for Austrians. Burgenland, the country's youngest federal state, also has a longstanding tradition of viniculture, producing both white and red wines, including the popular Blaufränkisch.
Beer is another popular drink in Austria, with the Mühlviertel region in Upper Austria being famous for its cultivation of hops. The country also has well-known breweries, such as Stiegl. Additionally, Austria is the birthplace of the energy drink company Red Bull, headquartered near Salzburg.
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Tourism
Austria's tourism industry has played a significant role in the country's economic growth since the 1950s, embracing modern mass tourism. The country has over 40,000 tourist establishments, employing more than 200,000 people.
Vienna, the nation's capital, attracts a large number of tourists year-round, with its historic architecture, cultural events, and vibrant nightlife. The city boasts stunning landmarks such as St. Stephen's Cathedral, Schönbrunn Palace, and Tiergarten Schönbrunn. Vienna is also known for its musical heritage, with romantic Waltz events and classical music festivals.
Salzburg, the birthplace of Mozart, is another popular destination, especially in the summer. The city offers scenic beauty, with nearby lakes and mountain ranges, including the Salzkammergut region and Lake Neusiedl, known for water sports.
Innsbruck, the capital of Tyrol, is surrounded by the majestic Alps and is a popular winter destination, with Ski Arlberg, one of the largest ski areas in the world. The western province of Vorarlberg reaches Lake Constance, offering a unique boat cruise perspective on Austria's treasures.
Austria's mountainous landscapes, opulent palaces, and high culture provide a blend of historical and modern attractions. The country also boasts numerous lakes, such as Wolfgangsee, Wörthersee, and those in the Salzkammergut region, ideal for nature lovers and outdoor activities like hiking and mountaineering.
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Construction and building
The construction and building industry is a vital pillar of Austria's economy, contributing over six per cent of the country's gross domestic product. The sector has experienced steady growth, with the market size reflecting the demand for both residential and non-residential infrastructure projects. The construction industry's performance also influences related industries such as real estate, manufacturing, and services. Infrastructure development enhances the overall productivity and competitiveness of the Austrian economy.
The construction sector in Austria covers various areas, including organizing projects, producing materials, machines, engineering tools, services, and civil engineering. The industry benefits from both private and government projects, with a high demand for residential properties driven by population growth. Despite robust demand, construction activity has been decreasing, with the number of dwellings approved for construction falling by 4.0% year-on-year to 74,763 units in 2020. This decline is attributed to challenges related to labour and skills shortages. According to a 2020 survey, 47.7% of companies in the construction sector face a shortage of skilled workers.
Austria's construction sector is supported by well-known companies such as Strabag AG and Porr AG, which operate internationally and have been involved in numerous major projects. Strabag AG, one of the largest construction companies in Europe, has expertise in infrastructure, transportation, buildings, and civil engineering sectors. Porr AG, established in 1869, has worked on significant projects like the Semmering Base Tunnel, a vital railway connection, and The Circle Vienna, a large-scale urban development. Another leading company, Swietelsky, exclusively focuses on infrastructure and transportation projects and is known for its efficiency and reliability.
The Austrian government has implemented initiatives to support the construction sector and address housing demands. In 2020, an agreement was reached between the EIB and Erste Bank to provide EUR 300 million for social housing over three years, facilitating the construction of new subsidised or non-profit rental units. Additionally, the European Commission approved Austria's Recovery and Resilience Plan, making EUR 3.5 billion in grants available, with a focus on green and digital transitions. Around EUR 209 million has been allocated for renovating buildings, contributing to the country's economic recovery and expected GDP growth.
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Logistics and transportation
Austria's logistics and transportation industry is booming, with growth in employment and productivity. The country has a well-developed and globalised distribution network for the transport of goods through cross-borders and international logistics systems. The industry primarily consists of forwarding agents, transport, handling, warehouse logistics providers, logistics technology providers, and transport companies. Overland transport includes commuter trains, autobusses, railways, cabs, ships, and air transport, which move cargo and commuters domestically and internationally.
Austria's transport infrastructure is of high quality, with the country ranked 10th globally for the efficiency of its railroad services and 10th for the quality of its roads. Austrian rail logistics and transportation companies are ideally located at the core of four out of nine of Europe's powerful core rail network corridors: Scandinavian-Mediterranean, Baltic-Adriatic, Orient/East-Med, and Alpine-Western Balkan. The country also has a strong international reputation in the logistics industry, with transport service providers that are internationally respected due to their experience and high level of customer orientation.
Austria is a leader in environmentally-friendly transport solutions in freight transport, telemetry in transport, cable car construction, and railway vehicle design. Rail is becoming increasingly important as a means of transport for multimodal logistics concepts, and ships are particularly important in the cargo sector, with Austria becoming a specialist in logistics solutions in the Danube region. The country is also working on implementing Low Emission Zones (LEZs) in cities like Vienna to limit access for older heavy-duty vehicles, with the government offering incentives for electric vehicles.
The logistics industry in Austria is constantly evolving, with new benchmarks being set by changes in global trade, online shopping, traffic restrictions to protect the climate and environment, and digitalization. The expansion of logistics centres, cargo centres, hubs, and logistics terminals is being pushed forward to alleviate the burden on roads and reduce storage and transfer times. Innovative solutions are also being implemented through the use of digitalization and IT for process optimization of transport flows and cloud technology.
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Frequently asked questions
Austria's economy is dominated by small and medium enterprises (SMEs) and the service sector, which generates the majority of the country's GDP.
The biggest industries in Austria include construction and building, electronics and electrics, tourism, food and drinks, logistics and transportation, automotive and chemical industries, as well as steel and mechanical engineering.
The tourism sector in Austria employs over 200,000 people across more than 40,000 establishments.
Austria is a popular tourist destination, attracting around 20.8 million foreign visitors in 2017, and 30.9 million in 2023.
