Brief analysis 23: Challenging competitive system in times of crisis

Austria's economy is currently not immune to international developments. The Competitiveness Index (ECI) is used by EcoAustria's economic research institute to measure a country's competitiveness. This takes into account the exports, investments and labor productivity of individual countries and places them in an international comparison. A current calculation, which already includes data from the third quarter of 2022, shows a deterioration in Austria's index value from 104.6 in the second quarter to 103 in the third quarter of 2022. Although the domestic business location remains in the middle of the European comparative economies, it has deteriorated from 12th to 17th place compared to 30 economic areas.

This decline in the index value is primarily due to the development of gross fixed capital formation. In Austria, this fell relative to GDP from 26.2% in the first quarter of 2022 to 24.4% in the third quarter of 2022. There was also a decline in net exports in the third quarter of 2022. While these still accounted for 2.2% of GDP in the second quarter of 2022, they only accounted for 1.7% in the third quarter. The decisive factor here is the decline in gross exports from 60.9% of GDP to 59%. Although gross imports also fell from 58.7% to 57.3%, this was to a lesser extent than gross exports. Finally, in terms of real labor productivity, Austria was able to maintain its position from the second quarter of 2022. Austria ranks 15th among the 30 economic areas under review and is therefore just above the comparative values of the EU-27 member states (105.3) and the eurozone (103.8).

In summary, it can be said that Austria's competitiveness has recently deteriorated. However, Austria's economy can still hold its own in the midfield in a challenging economic environment. In order to achieve positive development in the longer term, it needs the most stable framework conditions possible and reliable prospects, as EcoAustria expert Nikolaus Graf explains: "The expansion of renewable energy infrastructure, greater integration of the European energy market and accelerated approval procedures for energy generation plants are a useful contribution to strengthening competitiveness."

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