Austria is on its way to recovering from the economic crisis that was triggered by the pandemic and the war in Ukraine, the Federation of Austrian Industries said.
Producer prices have exceeded their upper turning point, which indicates a gradual decrease in cost pressure, especially for industry. The normalisation of prices of key raw materials, a pronounced decline in freight rates in the international transport of goods and a continuing easing of supply chain disruptions have all contributed.
Additional recovery potential is also expected for the services sector, mainly in tourism and leisure, as pandemic-related restrictions have now been largely lifted for them.
“The latest IV business survey shows signs of economic stabilisation”, Christoph Neumayer, Secretary General of the Federation of Austrian Industries, IV for short, said at a press conference on Tuesday.
“While companies’ assessment of the current business situation continues to deteriorate, the recessionary dynamics in industry should weaken over the next six months”, he added. This would make a return to an expansionary path from the middle of 2023 more likely.
According to IV Chief Economist Christian Helmenstein, a considerable decline in economic output can be prevented, which is also due to the “enormous public spending of the EU member states to cushion the effects of inflation”.
Current projections put expenditure at 7% for Austria and Germany. “The situation is starting to take a turn for the better, provided there is no escalation of the war in Ukraine or further unforeseen negative shocks”, Helmenstein stressed.
According to Neumayer, the industry’s core demand to politicians is “to strengthen the conditions for sustainable growth in Austria without delay” and in particular reduce energy costs for domestic production as these are much higher than for North American and Asian competitors.
This could be done “through various measures to such an extent that an incremental de-industrialisation with resulting losses in prosperity can be inhibited”.
It would also include structural improvements in the public sector and measures to reduce bureaucracy, as well as fight the shortage of skilled workers.
(Chiara Swaton | EURACTIV.de)
Source: euractiv.com
