Lexi Webster
Austria is a small, landlocked country in Central Europe with a rich history and a high-income economy. The country has a strong labour movement and a highly skilled labour force, with more than half of its wage and salary earners belonging to the Austrian Trade Union Federation (ÖGB). Austria's top economic sectors are services, industry, and agriculture, with the service sector alone contributing to almost 63% of the country's gross domestic product (GDP) and employing more than 70% of its active population. The country also has a strong focus on quality in agriculture, with a growing number of organic farms in the western lands. Additionally, Austria has a high standard of living and is ranked highly in per capita GDP, with its cities often ranking top in quality of life.
| Characteristics | Values |
|---|---|
| GDP per capita | $58,669 nominal GDP per capita ranked 13th |
| Quality of life | Ranked top in quality of life |
| Employment rate | 72% of people aged 15 to 64 have a paid job |
| Unemployment rate | 5.5% |
| Budget deficit | 0.7% of GDP in 2017 |
| Public debt | 78.4% of GDP in 2017 |
| Economic sectors | Services, industry, and agriculture |
| Natural resources | Iron ore, magnesite, and other minerals |
| Primary industries | Metal, electrochemistry, engineering, food, and luxury commodities |
| Trade unions | Austrian Trade Union Federation (ÖGB) with a total membership of about 1.5 million |
| Social partnership | Moderate, consensus-oriented wage policy cooperating with industry, agriculture, and the government |
| International organisations | United Nations, World Trade Organization, European Union, International Atomic Energy Agency, Organization of Petroleum Exporting Countries, and Organization for Security and Cooperation in Europe |
| International rankings | Ranked 21st overall in the U.S. News Best Countries rankings and 14th in the Legatum Prosperity Index 2023 |
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What You'll Learn
Austria's high standard of living
Austria has one of the highest standards of living in the world, with a strong economy and a high GDP per capita. The country's top economic sectors are services, industry, and agriculture, with the service sector contributing to almost 63% of the gross domestic product and employing more than 70% of the active population. The primary industries are metal, electrochemistry, engineering, and food and luxury commodities. Austria also has a rich history and was once a European power ruled by the Habsburg dynasty.
Austria's standard of living is also reflected in its low unemployment rate, which was 5.5% in 2017, considered low by European standards. The country has a skilled labour force, with about 72% of people aged 15 to 64 having a paid job, above the OECD employment average. Additionally, the country has a strong labour movement with the Austrian Trade Union Federation (ÖGB) pursuing a moderate, consensus-oriented wage policy and cooperating with various sectors on social and economic issues.
Austria's economy is closely tied to other EU economies, especially its main trading partner, Germany, but also to the United States, its third-largest trade partner. The country is a member of international organizations such as the United Nations, World Trade Organization, and European Union, and hosts key international groups, including the International Atomic Energy Agency and the Organization for Security and Cooperation in Europe.
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Strong economy
Austria is a well-developed market economy with a highly skilled labour force and a high standard of living. It has a strong economy that has helped it deal with crises such as the euro crisis in 2010 and the coronavirus pandemic. Austria's gross domestic product (GDP) is on par with the best performers in the Organisation for Economic Co-operation and Development (OECD), and inequality is lower than in most advanced countries. When it comes to GDP per capita, Austria is among the top 20 in the world, according to the World Bank.
Austria's primary economic sector is services, contributing to almost 63% of the gross domestic product and employing more than 70% of its active population. The country's top industries include metal, electrochemistry, engineering, and food and luxury commodities. Austria also has a strong agricultural sector, with a focus on quality over quantity. The country is rich in natural resources, especially iron ore, magnesite, and other minerals, and is a producer of petroleum and natural gas. Additionally, a considerable part of its energy comes from hydroelectric power, making it a leader in this field in the European Union.
Austria has a strong labour movement, with the Austrian Trade Union Federation (ÖGB) comprising various unions with a total membership of about 1.5 million, representing more than half of the country's wage and salary earners. The ÖGB has pursued a moderate, consensus-oriented wage policy, cooperating with industry, agriculture, and the government on a broad range of social and economic issues, contributing to Austria's peaceful social climate.
Austria's economy is closely tied to other EU economies, especially its main trading partner, Germany, but it also has strong trade relations with the United States, its third-largest trade partner. Austrian exports account for around 60% of the GDP, and the country has a positive trade balance. Austria's membership in the European Union and its access to the European Single Market have also contributed to its strong economy.
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Rich history
Austria's rich history dates back to the 1800s, when it was a Central-Eastern European multinational power, ruled by the family dynasty of the Habsburgs. It was the third most populous European empire after the Russian Empire and the United Kingdom. The Dual Monarchy Empire of Austria-Hungary, which lasted until 1918, was also ruled by the Habsburg family. During this period, Austria-Hungary rode the industrialisation and urbanisation age, investing in growing industries and maintaining a positive trade balance. They became powerhouses for manufacturing, mainly exporting electrical products such as home and industrial appliances, which remain important economic sectors.
The First World War brought an end to the age of empires and the Habsburg era. The First Austrian Republic, founded after the war, inherited an economy battered by the conflict, including the abolition of the gold standard in 1914. The country also suffered greatly during the Second World War, including the death and expulsion of most of its Jewish community. After the war, Austria re-established itself as an independent republic, pledging neutrality on the global stage.
Vienna, the nation's capital, became Europe's centre for classical music innovation. Austria's small size today belies its past as a European power that lasted for centuries. The country has a strong labour movement, with the Austrian Trade Union Federation (ÖGB) pursuing a moderate, consensus-oriented wage policy, cooperating with industry, agriculture, and the government. Austria's agricultural sector has been undergoing substantial reform under the EU's Common Agricultural Policy since it joined the EU in 1995.
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Robust labour movement
Austria has a robust labour movement, with the Austrian Trade Union Federation (ÖGB) playing a crucial role in shaping the country's economic and social policies. The ÖGB is a large federation, consisting of various unions with a total membership of about 1.5 million people, which is more than half of the country's wage and salary earners.
Since 1945, the ÖGB has pursued a moderate and consensus-oriented approach, working closely with industry, agriculture, and the government to address a broad spectrum of social and economic issues. This collaboration is known as Austria's "social partnership", and it has significantly influenced Austrian laws and policies, particularly in the areas of labour law and labour market policy.
The Social Democratic Party of Austria (SPÖ), the country's oldest political party, has historically been closely tied to the ÖGB and has shared its focus on social and labour issues. The SPÖ was particularly strong among the working class, and during its time in power, it implemented ambitious policies, including a large-scale construction programme of workers' housing and the introduction of free medical care.
The strength of the labour movement in Austria has contributed to the country's high standard of living. Austria's economy is closely tied to Germany, its main trading partner, and the country has benefited from its access to the European Single Market and proximity to other aspiring EU economies. As a result, Austria has one of the highest per capita gross domestic products in the world, with a 3.7% higher employment rate than the EU27 average in 2023.
However, there are challenges on the horizon. Austria is experiencing a trend of outmigration, particularly of young, skilled professionals seeking opportunities in neighbouring EU countries. While the country remains an attractive destination for immigrants, the government must address the issue of skilled professionals leaving to ensure continued economic growth and maintain its robust labour movement.
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Exports and international trade
Austria has a well-developed market economy with a skilled labour force and a high standard of living. The country's top economic sectors are services, industry, and agriculture. Austria's primary economic sector is services, contributing to almost 63% of the gross domestic product (GDP) and employing more than 70% of its active population. The service sector includes tourism, which is a significant source of income for the country.
Austria's industry sector includes a focus on manufacturing and exporting electrical products, such as home and industrial appliances. Additionally, the country has a strong mining industry, with natural resources such as iron ore, magnesite, and other minerals. Austria also produces petroleum and natural gas, although it needs to import some to meet its energy demands. A considerable portion of its energy is generated through hydroelectric power, making it a leader in this field in the European Union.
The agricultural sector in Austria is small but highly developed, focusing on quality over quantity. While only about half of the alpine country is suitable for crop production, the number of organic farms has increased significantly in recent decades. The Austrian agricultural sector has undergone substantial reform since the country joined the European Union in 1995, adhering to the EU's Common Agricultural Policy (CAP).
Austria's exports account for around 60% of its GDP and experienced an increase of 8.2% in 2017. The country's main trading partner is Germany, with the United States as its third-largest trade partner. Austria's membership in international organisations such as the World Trade Organization and its access to the European Single Market further enhance its international trade opportunities.
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Frequently asked questions
Austria has a strong economy, with a large service sector, a sound industrial sector, and a small but highly developed agricultural sector. It has a high standard of living and its cities often rank top in quality of life. Austria's gross domestic product (GDP) is on par with the best performers in the Organisation for Economic Co-operation and Development (OECD), and inequality is lower than in most advanced countries.
Austria's primary industries are metal, electrochemistry, engineering, and food and luxury commodities. The service sector is the country's primary economic sector, contributing to almost 63% of the gross domestic product and employing more than 70% of its active population.
In the 1800s, Austria was a Central-Eastern European multinational power, ruled by the Habsburg dynasty. During this time, the country rode the industrialisation and urbanisation age, investing in its growing industries and maintaining a positive trade balance. Today, Austria's economy is closely tied to Germany, its main trading partner.
Austria's unemployment rate is low by European standards. In 2017, it fell by 0.3% to 5.5%.
