Lyla Lindsey
Austria's industrialization began in the second half of the 19th century, during the final decades of the Austro-Hungarian Empire. The GNP per capita grew roughly 1.76% per year from 1870 to 1913, a rate that compared favourably to other European nations such as Britain, France, and Germany. However, Austria's industrialization process started later than in other European states, and it lagged behind in terms of overall output. The economy of Austria-Hungary was largely rural, with 67% of the workforce in agriculture in 1870, and only 16% employed in industry. The capitalist mode of production spread throughout the Empire during its 50-year existence, replacing medieval institutions.
| Characteristics | Values |
|---|---|
| When did industrialization begin in Austria? | The second half of the 19th century |
| When did industrialization double in the Austrian sector of the Austro-Hungarian Empire? | Between 1891 and 1913 |
| How did the annual economic growth in the years before World War I compare to other European powers? | It was higher than in most of the other major European powers |
| How did industrialization levels fluctuate throughout the interwar period? | They fluctuated, with output reaching 1937 levels in 1929 before falling below 60% during the Great Depression |
| Did Austria's industrial output return to pre-war levels after World War II? | Yes, by 1949 |
| How did output change between 1952 and 1963? | It doubled |
| What was the primary energy source in the Habsburg Empire for much of the 19th century? | Woodfuel |
| When did coal consumption overtake wood consumption in the Habsburg Empire? | In the 1890s |
| How did foreign trade in the 19th century compare between the UK and the Habsburg Empire? | Foreign trade was fundamental to the UK's industrialization but played a less important role in the Habsburg Empire |
| What were the primary industries of the Austrian and Hungarian parts of the Habsburg Empire? | Austria specialized in manufactured goods, while Hungary focused on agricultural raw materials and processed food |
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What You'll Learn
- Industrialization began in the second half of the 19th century
- Austria's economic growth was strong in the late 19th century
- Austria's industrial output returned to pre-war levels by 1949
- Austria's industrialization levels fluctuated during the interwar period
- Austria's industrial growth was fastest in the decades after the war
Industrialization began in the second half of the 19th century
Industrialization in Austria began in the second half of the 19th century, during the final decades of the Austro-Hungarian Empire. This period witnessed significant economic growth, with the GNP doubling between 1870 and 1913, outpacing other European nations. However, Austria started its sustained modernization process later than its counterparts, resulting in a lag compared to other European states.
The industrialization process in Austria was characterized by technological advancements and urbanization. The country's economic growth was centered around cities like Vienna, Budapest, and Prague, as well as the Austrian lands, the Alpine region, and the Bohemian lands. The western regions, particularly Prague and Vienna, excelled in various manufacturing industries, while the eastern parts focused on agriculture and, later, processed food products.
The energy landscape of Austria during this period underwent a transition. Initially, woodfuel was the primary energy source, but by the 1890s, coal consumption surpassed wood, marking a shift towards industrialization. This transition had a notable impact on land use, reducing the pressure on woodlands and fostering forest expansion.
Foreign trade played a less significant role in Austria's industrialization compared to other countries. Production was largely aimed at the domestic market, and the empire was self-sufficient in cereals throughout the 19th and early 20th centuries. However, Vienna raised tariffs in the 1870s and 1880s to protect its growing industries, and foreign investment during this period was dominated by Germany, France, and Great Britain.
The late 19th century also saw a shift in the economic landscape within the Austro-Hungarian Empire. The eastern regions, particularly Budapest, became predominant in the empire's strong agriculture and food industry, contributing significantly to exports. By the end of the century, economic differences began to even out, with the eastern parts of the empire consistently surpassing the west in growth rates.
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Austria's economic growth was strong in the late 19th century
During this period, foreign investment in the Empire was dominated by Germany, followed by France, and to a lesser extent, Great Britain. However, Austria exported more capital than it imported, and foreign trade averaged about a fourth of Austria's GNP. To protect its growing industries, Vienna raised tariffs in the 1870s and 1880s, resulting in strong economic growth as the GNP doubled from 1870 to 1913. In the Austrian sector of the Empire, industrialization doubled between 1891 and 1913, and annual economic growth in the years before World War I was higher than in most other major European powers.
The economy of Austria-Hungary changed slowly during the existence of the Dual Monarchy from 1867 to 1918, with the capitalist way of production spreading throughout the Empire. The population of the Empire was heavily rural, with 67% of the workforce in agriculture in 1870, and 60% in 1913. However, the western areas, concentrated around Prague and Vienna, excelled in various manufacturing industries. The most dynamic city was Pest, which became Hungary's administrative, political, economic, trade and cultural hub.
The strong agriculture and food industry of Hungary, with Budapest as its centre, became predominant within the Empire and made up a large proportion of exports to the rest of Europe. Hungary became the world's second-largest exporter of flour after the United States, and Budapest became the world's largest flour-milling centre. The Empire also built up the fourth-largest machine-building industry in the world and was the third-largest manufacturer and exporter of electric home appliances, electric industrial appliances, and facilities for power plants.
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Austria's industrial output returned to pre-war levels by 1949
Austria's industrialization began in the second half of the 19th century, during the final decades of the Austro-Hungarian Empire. In the Austrian sector of the empire, industrialization doubled between 1891 and 1913, and annual economic growth in the years before the First World War was higher than in most other major European powers. However, the Austro-Hungarian economy as a whole lagged behind other European nations as modernization had begun much later.
The Austro-Hungarian economy was heavily focused on heavy industry, particularly machine building for the electric power, locomotive, and automotive industries. The empire was the fourth-largest machine-building industry in the world, and Vienna, Bohemia, and Silesia were centers of industrialization. The first Hungarian-designed and produced airplane was flown in 1909, and the Hungarian aircraft industry began developing between 1912 and 1918. During World War I, Hungarian factories produced fighter planes, bombers, and reconnaissance planes.
The various regions of the Habsburg Empire formed a largely self-sufficient economic area, with Austria supplying industrial goods and services in exchange for food and raw materials from other regions. However, the territorial losses in the Treaty of St. Germain after World War I significantly impacted Austria's economy. The successor states erected high tariff barriers to protect their industries from Austrian competition, and Austria struggled to meet its demand for food and energy in the early post-war years.
Despite these challenges, Austria's industrial output recovered rapidly after World War II, returning to pre-war levels by 1949. The decades after the war saw the fastest industrial growth, with output doubling between 1952 and 1963. This growth continued until the 1973-1975 recession, which disrupted Austria's industrialization trajectory.
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Austria's industrialization levels fluctuated during the interwar period
Industrialization in Austria began in the second half of the 19th century, during the final decades of the Austro-Hungarian Empire. In the Austrian sector of the empire, industrialization doubled between 1891 and 1913, and annual economic growth in the years before the First World War was higher than in most of the other major European powers. However, Austria's industrialization process started much later than in other European states, and so it lagged far behind.
Following the dissolution of the empire after the Second World War, Austria's borders shrank significantly, and its industrialization levels fluctuated during the interwar period. In comparison to the empire, Austrian industrial output was much lower as it had lost many of its natural resources to new states in its former territories, such as Czechoslovakia and Poland. Using 1937 figures as a benchmark, output had already reached a similar level in 1929, but then the Great Depression saw it fall below 60%. Austria was then formally annexed by Germany in 1938, and figures are unavailable for the next nine years.
Austria's industrialization levels were also impacted by the country's geography. The mountainous terrain impeded trade and travel, and the nation's only sizeable port, Trieste, failed to become a first-class trading centre. Additionally, the nation’s elite were trapped in a feudalistic mindset until well into the 19th century. The construction of the railway system played a decisive role in industrialization: starting in the mid-1850s, the Kaiser Ferdinand Northern Railroad provided services from Vienna to Prague.
The industrialisation of the Habsburg Empire originated primarily in the non-Austrian regions: coal mining and textiles in Moravia and the innovative heavy industry of Bohemia became drivers for economic and technical progress. Meanwhile, Upper Styria developed into an industrial core region, where Karl Wittgenstein formed established mining and iron-working operations into a powerful cartel. Textile production developed in the Vorarlberg region, and in Vienna, the manufacturing of rail cars and locomotives flourished.
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Austria's industrial growth was fastest in the decades after the war
Austria's industrialization began in the second half of the 19th century, during the final decades of the Austro-Hungarian Empire. In the Austrian sector of the empire, industrialization doubled between 1891 and 1913, and annual economic growth in the years before the First World War was higher than in most of the other major European powers. However, it was still lagging far behind Europe's other states as their industrialization process had begun much earlier.
Following the dissolution of the Austro-Hungarian Empire after the First World War, Austria's economy suffered massive inflation, unemployment, and near economic collapse. The First Austrian Republic, founded in 1918, inherited an economy battered by the war. The abolition of the gold standard in 1914, the balance-of-payments deficit caused by the need to import food and fuel, and the use of deficit spending to finance food subsidies all contributed to the economic woes. By 1929, Austria's growth averaged 0.35% per annum, unemployment had increased five-fold, bankruptcies had risen 41-fold, and the trade deficit had doubled.
Austria was annexed by Nazi Germany in 1938, resulting in a loss of control over its economic policies. After the end of World War II in 1945, Austria regained its independence and its 1937 frontiers. The country experienced rapid economic growth in the post-war decades, with its industrial output returning to pre-war levels by 1949. Between 1952 and 1963, Austria's industrial output doubled, and it was on course to double again in the following 12-15 years before the 1973-75 Recession.
Austria's post-war economic growth was driven by rebuilding efforts, which led to an average annual growth rate of more than 5% in the 1950s and around 4.5% through most of the 1960s. The country also benefited from its location near the "Iron Curtain," becoming a nerve center between the West and the East. Additionally, Austria's membership in the European Union (EU) has attracted foreign investors and reduced its economic dependence on Germany, its main trading partner historically.
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Frequently asked questions
Austria began to industrialize in the second half of the 19th century, during the final decades of the Austro-Hungarian Empire.
The GNP per capita grew roughly 1.76% per year from 1870 to 1913. The output of coal, iron, and beer was comparable to Belgium, which had a much smaller population.
Economic growth was centered on Vienna, Budapest, and Prague, as well as the Austrian lands, the Alpine region, and the Bohemian lands. In the later years of the 19th century, rapid economic growth spread to the central Hungarian plain and the Carpathian lands.
